The Naive Optimist @ryanleecarson - Tumblr Blog

The Rise of the Digital Middle Class

When I was 17, Ms. Bruce, my Math Teacher asked me if I wanted to learn how to control computers. My mind was blown. "What? I can command this amazing machine to do anything I can dream up? ... I'm freaking in."

Her simple invitation to a small elective programming class at my high school fundamentally altered the path of my life, and it all started with this ...

program Hello; begin writeln ('Hello, world.') end.

Being Middle Class is Great

Being Middle Class means you can afford a home, own a car and comfortably take care of your family. It means you can put in a day of hard work and get a day of fair pay.

50% of American adults lived in middle-income households in 2015. In 2001, that number was 54% and in 1971 it was 61%.1

Being Middle Class is wonderful, but fewer and fewer people are in this group. The Middle Class is shrinking at an astonishing rate.

The Rise of the Digital Middle Class

I believe we are seeing a phenomena that will reverse this trend: The creation of the Digital Middle Class.

What defines the Digital Middle Class? People who ...

Don't have a technical University Degree (Computer Science, etc)

Write code or use code to accomplish objectives

Earn $45,000 (entry-level) to $134,000 on average 2

Only need a laptop and a connection to the Internet to accomplish work tasks

There are two key things happening here:

1) Massive Growth in Coding Jobs

The key here is the growth in the number of these jobs. There are going to be 1,000,000 job openings by 2022. These jobs are in every industry.3

2) The Ability to learn coding online affordably

Coding is a computer-based skill, which lends itself extremely well to being taught online. To learn this amazing skill, all you need is a cheap laptop and a broadband Internet connection. There is no need to travel physically to a classroom, which means online schools like Treehouse can offer an effective online curriculum for a fraction of the cost of a University Degree.

Online coding schools can also continually update their curriculum to reflect the demands of the job market, in near real-time. The agility is necessary to effectively teach someone how to code - it is of no use to learn outdated technologies.

Software is Eating the World

What is causing this explosion in jobs?

As Marc Andreesen famously penned: "Software is eating the world."

Almost everything you interact with in the future will have code in it. Clothes, appliances, shoes, roads, backpacks, doors, phones, umbrellas, chairs, lights, vehicles and more. You name it, it'll be connected to the Internet and will be running code. This is also called the Internet of Things or IoT.

All of these things need programmers to write and maintain their code. I personally believe that the Bureau of Labor's projections for the number of job openings is vastly conservative.

Here's a simple example ...

The first car to use code was the 1977 General Motors Oldsmobile Toronado which had around 50,000 lines of code.

The business research firm Frost & Sullivan estimated that cars will require 200 - 300 million lines of code in the near future.4 For every one line of code in the Oldsmobile, that is 6,000 lines of code in cars of the near future.

Mobile Penetration is Skyrocketing

Another massive driver for job growth is the phenomenal growth in mobile users globally. And you guessed it: mobile phones need more and more software, which means we need a huge amount of mobile developers.

In 1995 there were 80,000,000 mobile phone users, which was 1% of the world's population. Now, it's a staggering 5,200,000,000 which is 73% of the world.5

This is Real

I'd like to close by showing you the real world story of Bryan Knight. He’s an awesome example of the new Digital Middle Class ...

I believe people like Bryan, the Digital Middle Class, will be a major driver of the world economy in the future. It’s an awesome time to be alive.

Annotations

Pew Research defines Middle Class as "earning between two-thirds and double the median household income"

Hired.com State of US Salaries Report

Code.org statistics

ieee.org

KPCB Internet Trends 2015 Report

How I’m using 4DX to reach my fitness goals

I’m using a pretty powerful execution ‘operating system’ to really crank on my fitness goals. It’s called The 4 Disciplines of Execution. We’re using it at Treehouse and it’s freaking awesome, but I've also applied it to my personal life.

My WIGs (Wildly Important Goals) are:

180 lbs

12% Body Fat

My Lead Measurements (what I can control every day) are:

Lift weights 3x per week

Run 0.25 miles and do 10 burpees (4 sets), 3x per week

Eat 270g protein per day (body weight x 1.5)

Do 400 situps per week

Avoid alcohol, 3x per week

And my Scoreboard is here.

If you don't know what 4DX is, I'd highly recommend reading the book. It's had a huge affect on my business and my personal life.

#4DX #fitness

Entrepreneurs think they're badass

I've been running my own businesses for 10 years and I've learned something:

Entrepreneurs who change the world aren't self-made. They're just ...

Born at the right time, when large world-wide patterns are changing

Passionate about one of these world-changing patterns

Able to create or raise capital

Happy to take risks

We like to believe is that there's some secret formula to building a big world-changing business. We believe that if we can just turn the dials just right, our graphs will hockey-stick upwards and our company will change the world.

Not true.

I know because I've experienced it.

My Experience

My three first business were small time:

FlightDeck - A tool to send large files to clients for approval. Just me, doing less than $12,000 per year in revenue. Fizzled out because I priced it too high for a self-serve model.

DropSend - A freemium tool for sending large files. Just me and a part-time Developer, doing $300,000 per year in revenue. Sold the whole business for around $450,000.

Carsonified - An in-person training company for Web Designers and Developers. Grew to about 12 full-time folks, doing around $2m per year in revenue. Sold in 2011 for a pretty poor multiple on revenue.

Treehouse is a completely different beast. 75 full-time employees (hiring a ton more), on track to change millions of people's lives, raised $13m+ of capital, working towards doing $100m+ of revenue, etc.

I'm the same guy, so what's the difference? Why am I on the cover of a magazine all the sudden?

Here's why: I'm passionate about a world-changing pattern, at the right time in history. Notice the cover talks about igniting a revolution, not tweaking the numbers to increase EBITDA by 1.2%.

The world-changing pattern is this: The ability to become job-ready and get a job is being de-coupled from the university degree and simultaneously, there is an explosion of related well-paying tech jobs.

I'm hell-bent on creating an online school that actually makes people job-ready, without debt, and then helps them find a job.

There's no guarantee we'll succeed, but I'm going to die trying. I can't wait to see what the future holds - it's going to be one freaking exciting ride.

I'm old enough to finally realize that I'm not leading Treehouse because I'm a baddass entrepreneur. I'm just fucking lucky.

#entrepreneuship

What happened when I deleted email, Facebook, Twitter and Instagram off my phone

Recently I finally hit some sort of exhaustion with always being distracted by my phone. Every time I stood still I would grab it out of my pocket. Every time I went to the bathroom, I would check some email. Every time I had a minute to think, I would open an app.

The problem with all these micro-phone-checks is that they were never long enough to really process anything mentally. A couple Tweets here, a quick email response there, but no sustained thought or focus.

So I deleted Facebook, Twitter, Instagram and my Gmail off my iPhone.

So far it's been shockingly nice. I thought I would be fine without the social networks, but I didn't think I'd be able to get by without email on my phone. Crazily, I'm doing just fine.

When I come home from work, I just leave my phone by the door because there's nothing to do on my phone. I'm finding it's easier to focus on my two boys (age 3 and 6) and my wonderful wife. I'm just more present.

I went to a Chinese restaurant last night to pick up some food and while it was cooking, I just sat at the bar and drank a beer. There wasn't anything to do on my phone so I didn't get it out. It was such a refreshing and strange feeling to just look around and soak in the environment. I noticed a huge amount of detail I would've never seen previously.

I hope this is another nail in the coffin of all the work-till-your-eyes-bleed-and-your-wife-leaves-you crap that most 'successful' entrepreneurs spout.

I have 75 employees and 90,000 Students and it's working just fine.

#Work-Life

Is it possible to have a great product with no managers and a work-from-home culture?

I get a lot of emails, phone calls and tweets that can be summarized like this ...

If you don't have managers, and the team is distributed around the World, who decides priorities and makes decisions about the product?

Great question! We have 70+ full-time employees, 70,000 Students and are doing over $10,000,000 in revenue a year, so let's dive in ...

I've already blogged about how we set company-wide priorities but what we've discovered is that everyone needs three views:

30,000 foot - What are our company-wide goals? What's our market and our business plan?

5,000 foot - What are our current, next and near-future Projects, broken down by 'Focus Areas' (more on that below)

10 foot - What should I do today?

30,000 foot

My Co-Founder, Alan, and I set our company-wide goals and mission. We communicate this in two ways:

Company-wide meetups once a year where we all get together for a week at a hotel to hang out, drink, and go in hot tubs (a lot).

Monthly 15-minute videos where we talk about big-picture things we see happening.

5,000 foot

We use three primary tools for project management and communication at Treehouse: Flow, Convoy and HipChat.

Flow is our project management software, Convoy is our company-wide forum and HipChat is for chat.

What Convoy and Flow weren't doing is helping people understand what everyone else was planning on doing next, and in the near future. A lot of companies use a 90-day plan but we don't do that because there isn't a management team to decide what's important - everyone decides. However, this leads to a ton of conversations that went like this:

I see this big problem/opportunity over here. Does anyone know about this? Is anyone planning on tackling this at some point? What's our plan in this area?

Eventually we'll wind this into Flow, but for now, we're using a very simple Google Doc that's broken down like this:

Marketing

Current Projects that are high priority

Next Projects that are high priority

Future priorities

Education

Current Projects that are high priority

Next Projects that are high priority

Future priorities

Operations

Current Projects that are high priority

Next Projects that are high priority

Future priorities

etc ...

Focus Areas

The above three areas (Marketing, Content, Operations) are examples of what we call Focus Areas. They are teams of people that tend to focus on specific parts of the business. They are comprised of many different types of job roles like Designers, Developers, Teachers, etc.

People choose to join or leave these Focus Areas as they see fit (providing that it won't hurt the team). Realistically that doesn't happen very much. People seem to be staying inside their chosen Focus Area.

When a Focus Area wants to add more people to itself, they OK it with me and my Co-Founder and then when we hire new people, they can choose which open slots they want on Focus Areas with open slots.

10 foot

Since we don't have managers, everyone decides what they do with their time, 100% of the time. If you want to read more about how we decide what to do every day, and communicate that to others, head over here to my post on Quartz.

What about the Product?

We have a way to set priorities and communicate them clearly, but isn't our Product going to end up disjointed because there isn't one strong vision?

I can only speak from experience and I have to say that, in my humble opinion, the user experience on Treehouse is great. Do we have problems? Yes. But on the whole, I'm very proud of what we've built - all without 90-day plans, managers and a big office that everyone has to commute to every day.

[Thanks for the photo gerrydincher]

#nomanagers #management #business #entrepreneuship

The negative side of #NoManager companies

This is the fifth article in my series on why we removed all managers at Treehouse. Here are the other articles …

Part 1

Why we removed our managers

What managers actually do

What really motivates people

Part 2

How people choose what to work on

How priorities are determined

How Projects work and what tools we use

How budgeting works

Part 3

How career progression works

How compensation works

How reviews and discipline work

Part 4

The tools we use for communication (I only answer around 10 emails per day)

Part 5 (this article)

The six cons of a #NoManager company

Negative #1: Lots of chaos

Normally companies have a tightly controlled priority list (determined by the executives and communicated down the ranks) and all activity is focused on this.

Being a part of a #NoManager company feels like being part of an ant colony. Everyone is really busy doing something. It's not entirely clear what's happening, but there is a lot of activity and eventually large structures/tunnels get built.

I know for a fact that we have Projects that were started and eventually abandoned because another Project was conflicting or duplicating their work. This is obviously a waste, but we feel that some waste is inevitable and we'd rather take a slight hit on productivity than happiness.

The chaos comes from the fact employees in a #NoManager company do something because they think it's important, not because someone asked them to do it. There isn't someone above them that can say "I know exactly why PersonX is working on ProjectY". This feels chaotic because as a CEO, I want to know and control what everyone is working on, but I can't.

Negative #2: Coordination is very hard

We don't have Managers to coordinate across Projects so it's up to individuals to take time to communicate what's happening on their Project and how it affects others. Non-Managers aren't used to the level of communication needed to coordinate with other Teams and Projects so there often is not enough proactive communication and coordination.

What is supposed to happen is that folks can read the status updates from other Projects to get a sense of what is happening and how they should act. People get busy though and this often doesn't happen.

We're learning that we need to decide as a company what our quarterly goals are, and then propose Projects accordingly. That high level coordination happens at the beginning of each quarter as we set our goals and priorities.

An example of this is that me and my Co-Founder decided we could probably hit a goal of $X million in revenue in Q1 of 2014. We then asked the Team to set their own priorities for how they can make that happen. It took us about two days to hash this out over Convoy and Google Hangouts. Once that was done, then each Team communicated to the whole company what they were planning on doing in Q1.

Negative #3: Starting Projects can be slow

In the past the executives would create a 90-day plan, communicate down to the managers and people would start working. It didn't matter if the troops thought the priorities were good or bad - they just did what they were told.

Now you have to propose a Project, explain it thoroughly and convince people to join. This process can take weeks or months. Often no one wants to work on your Project and it dies.

Negative #4: I can't make people do things

Pre #NoManager all I had to do to get something done was ask someone. As the CEO they had to do what I said. Now I have to convince people that they should do something. It's much better for the company but extremely frustrating for me. I've had people tell me they don't have time or aren't interested in my ideas. It sucks but it's part of running a #NoManager company.

Occasionally my Co-Founder and I will absolutely need something to happen. If that's the case, we "pull our Co-Founder card" and politely ask someone to get something done. We try to do this as little as possible but it does happen occasionally.

Negative #5: It takes longer to understand what's going on

In normal companies all the CEO has to do is have a meeting with his executive team, and he's up to speed. Not in a #NoManager company. When I return from holiday and I'm out of the loop, I have to spend about two days reading through status updates and chatting to people.

It's frustrating. I'm not going to lie.

Negative #6: Harder to hire people

Hiring people in a #NoManager company is a collective decision so it takes longer. Tommy Morgan describes our general process for hiring Developers (which is similar to other roles) in this post. The final step in that process is that the team (for instance the Design Team) has to all agree they should hire this person. If anyone has doubts, then we don't hire.

A lot of people think they want to work without managers, but actually they like the security of someone telling them what to do every day. This means working at a #NoManager company isn't right for everyone, therefore cutting down the potential number of people we can hire.

#NoManagers

How I gained 15 lbs and got a lot stronger

I just completed Jim Stoppani’s Shortcut to Size program and I’m really happy with the results! The goal was to get to 185lbs and gain as little fat as possible.

Here’s the data:

Measurements (inches) Aug 19 to Dec 9

Pecs 38.75 -> 40.75 = +2.00 (+5.16%)

Bicep 11.875 -> 12.7953 = +0.92 (+7.75%)

Waist 35.25 -> 37.0079 = +1.76 (+4.99%)

Thigh 19.75 -> 21.4567 = +1.71 (+8.64%)

Calf 13.375 -> 14.4685 = +1.09 (+8.18%)

Weight 172.6 -> 188.0000 = +15.40 (+8.92%)

Body Fat 12.90 -> 14.00 = +1.10 (+8.53%)

I used the BodyMetrix Personal to measure my body fat.

Increase in strength

Those are exciting results for me but the thing that blows my mind is how much stronger I am now. Here’s some sample data (pounds, 3-5 reps):

Bench 95 -> 190 = +95 (+100%)

Squat 95 -> 220 = +125 (+132%)

Lat Pull Down 75 -> 180 = +105 (+140%)

My shoulder is healing so I skipped Shoulder days, so I only worked out three times a week, instead of the prescribed four times.

I followed the nutrition and supplement advice pretty strictly. It was not comfortable to increase to 3200 healthy calories per day but after awhile my body started to need the calories as I was more and more hungry.

The major cons to this program are time (6 hours per week, including travel to/from the gym) and the cost for eating a lot of protein/supplements.

My next goal is to get to 195 lbs and 12% body fat. I’ll be doing this with Stoppani’s Shortcut to Shred program.

Jim has been very supportive and responsive over Twitter. He’s a breath of fresh air in the murky world of weight lifting and fitness. He’s got a PHD, he’s ripped and he’s open and real.

Has anyone else had experiences they’d like at share?

#workout #weightlifting #weight gain #fitness

How to communicate in a #NoManager company

This is the fourth article in my series on why we removed all managers at Treehouse. Here are the other articles ...

Part 1

Why we removed our managers

What managers actually do

What really motivates people

Part 2

How people choose what to work on

How priorities are determined

How Projects work and what tools we use

How budgeting works

Part 3

How career progression works

How compensation works

How reviews and discipline work

Part 4 (this article)

The tools we use for communication (I only answer around 10 emails per day)

Future articles

The pros

The cons

The future

Communication Tools

We actively discourage use of email because it silos information, discourages accountability and causes busywork. The default mode of communication at Treehouse is 'public'. This is important because without managers, everyone needs to be able to drop into a Project and understand where it's at. If all the progress and information is hidden away in email, no one can access it except the sender and receiver.

We have four primary tools:

Convoy - General discussions, celebrations, animated GIFs, banter and trolling

Flow - Project status

HipChat - Group chat and IM

Email and Docs - Google Apps

Our hope is to open source Convoy and Flow at some point, but it's not high on our priority list right now.

Convoy

We've found that the forum model works really well for company-wide discussions. We built a simple Reddit-clone to do this (read more on that here) called Convoy.

Email is a terrible tool for group discussion because ...

It clutters everyone's inbox

It's hard to parse discussions because of the lack of threading

You have to evaluate if you should open/archive/delete/star each incoming email

Convoy is great for company-wide discussions because ...

You only read/interact with things that interest you

Voting up/down adds a subtle and quick way to interact with other people without having to type

We have person-tagging so that if you want someone to see something, you simply type @persons-name and they get a notification inside Convoy (not email).

Convoy has worked wonderfully for us. We use it for ...

Discussing competitors

Throwing around ideas

Trolling each other and having fun

Celebrating victories

Discussing industry news or trends

The drawback of Convoy is that it can be distracting. You need to have a highly disciplined team to self-police themselves. This is a general drawback of #NoManagers - it's noisier and more chaotic. Our belief, however, is that creativity and innovation arise from the chaos.

Flow

Since we don't have Managers to decide which ideas get implemented, we had to build a simple tool to allow anyone to propose ideas and tell the whole Team.

I explained how we use Flow in this post, so if you want details, please head there.

Once a Project is started, there is a discussion forum attached to the Flow project. If you want to discuss something then you create a new discussion thread. Everyone who's joined the Project is then emailed so they can stay in the loop. We felt email was necessary because if you've joined a Project, then you should be aware of all discussions related to the Project.

Every day, you update your status on the Project in Flow. This way anyone can drop by the Project page and see what's happening, without bothering anyone.

The actually project management happens outside Flow. Each Project chooses whatever software or system they feel is best suited for the Project. This has caused some friction in the company as some people want Flow to also offer Project Management functionality (like Basecamp or Trello). I've been against this idea as I feel it could bloat pretty quickly into a Trello/Basecamp clone, which is overkill.

Flow is basically a simple communication tool: Which Projects are happening, who is working on them and what their current status is.

HipChat

We use a group-chat/IM tool called HipChat. It's a desktop/mobile/web app for private group chat. We currently have 23 rooms spanning everything from 'Design', 'Marketing', 'Audio' to 'The Nerd Herd'.

Anyone can create a room and they're primarily used for quick-fire chat related to Projects. Because I'm the CEO, I join almost all rooms so I can get a birds-eye view of what's happening.

We ask everyone in the company to log into HipChat during work hours. We're spread out over the World so everyone needs to be contactable.

Email and Docs

We use Google Apps for our email and documents. We use commenting and live-editing in Google Docs quite a bit. We only use Excel for finances (Google Spreadsheets can't handle the complex spreadsheets we need for financial models).

Email is email. Blech. Here are the email rules ...

Don't use it unless it's your last resort

Never discuss Projects in email. Use the discussion forum in the Flow Project. All information should be as public as possible.

Don't worry about inbox zero. Focus on your Projects in Flow. Ideally check your email only once or twice a day.

Urgency

We use this rubric to determine the urgency of communication ...

Phone or Google Hangout: Need an answer immediately

IM or Text: Need an answer in the next hour

Flow Discussion: Need an answer in next day or two

Email: Need an answer in next day or two

Convoy: No answer required

Next time ....

I’ll cover the large Pros and Cons to a #NoManager company.

[Thanks to chrisperriman for the photo.]

#NoManagers

How salaries, career progression and reviews work in a #NoManager company

This is the third article in my series on why we removed all managers at Treehouse. Here are the other articles ...

Part 1

Why we removed our managers

What managers actually do

What really motivates people

Part 2

How people choose what to work on

How priorities are determined

How Projects work and what tools we use

How budgeting works

Part 3 (this article)

How career progression works

How compensation works

How reviews and discipline work

Part 4

The tools we use for communication (I only answer around 10 emails per day)

Future articles

The pros

The cons

The future

No Ladder to Climb

Now that we've removed managers, there isn't a traditional career ladder to climb. At most companies the way to get more money and influence is by becoming a manager. How does this work in a #NoManagers company?

Everyone is hired at Treehouse at an industry-standard salary level that matches their job description. Most of our team is distributed and outside of expensive outlier markets (like Silicon Valley or NYC).

The only way to get a salary increase is by performing consistently well in reviews. We don't have a profit-sharing plan or bonuses (other than the sales team which has a traditional sales team bonus structure).

One of the great advantages of a #NoManager company is that people aren't forced to go into management to get more money or increase their power. Instead of climbing the corporate ladder they can focus on getting better and better at what they love and were hired to do.

Peer Reviews

Accountability is vital for #NoManager companies to succeed. Since no one is telling anyone what to do, slackers could just sit around and do nothing, right? Peer Reviews make sure that bad folks are rooted out and asked to leave the company. We chose to implement a system that's similar to the 360 Degree Review but with a twist. I'll explain how it works below.

How Reviews Work: The Review Cycle

A Review Cycle will occur every three months. Each person writes anonymous reviews of colleagues that they've worked with closely since the last review period*. For example, if you were a Developer and you worked with a Designer and a Customer Support person on a Project, you'd review both of them and they'd both review you.

* What does "worked with closely" mean? Typically this would include anyone you worked with on a Project or product since the last reviews occurred. It will also include people you collaborate with closely even if you aren't explicitly involved on a Project with them - for example, Designers are going to be in constant communication and will collaborate with each other on ideas even if they're not officially on Projects with each other, and we want to be sure to capture that interaction in our review process. If a Project is extremely quick (for example, less than a day) then a review isn’t needed.

The great thing about only reviewing people that you actually worked with, is that you know if they were any good at their job. You experience it first hand, instead of through a manager's report or through occasional interaction.

Everyone is expected to write a solid review in ~15-20 mins, per person. It could take much less time if we're organized about keeping notes between review cycles.

Reviews are submitted to a Review Committee made up of myself, Alan (my Co-Founder), Mike (CFO) and Rich (Accounts). The Review Committee then reviews all submissions and asks for clarification if needed. Afterwards, they anonymize and consolidate all reviews on an individual into one Review Document. That document will be used to guide the review (in-person or Google Hangout between person being reviewed and the review committee). Each person gets a copy of their review documents.

The Review Questions

You rate your colleague on the review form (we use a password protected form on Wufoo) on the following things:

Objective judgement

Communication

Energy giver, positive working style, attitude and effort

Level of skill

You have to choose between 1 - 5 for each area and can add accompanying text to explain your answer.

Outstanding

Exceeds expectations

Meets expectations

Below expectations

Unsatisfactory

Not applicable

We also have an optional text field for additional comments and/or constructive criticism for the person you're reviewing.

We also ask everyone to answer the following questions about themselves:

How do you think you are doing?

How do you think Treehouse is doing?

How do you think your team is doing?

What's keeping you from doing the best work of your life?

Is there anything else you think the Review Committee should be aware of?

Good vs Bad Reviews

If someone performs below expectations they will most likely not be recommended for a raise. Depending on the circumstances for why they performed below expectations, they may be issued with a formal warning to improve performance. If subsequent reviews are below expectations again and performance hasn’t improved, they will probably be asked to leave Treehouse.

Major Cons

Two large drawbacks to this Peer Review system so far are:

It is very time consuming. As we grow the company we'll need to find a way to make this as seamless and easy as possible. Theoretically it should scale as there's a practical limit to the number of people you can work closely with during a 3-month period - no matter how large the company grows.

People weren't as harsh on each other as they should've been. Our belief is that because we only finished the first review cycle that people are just getting used the the system. In the future however, feedback will need to be much more constructively critical to be valuable.

Raises

Alan and I are in control of raises. Recommendations from the Review Committee and Treehouse’s financial situation will be the key determining drivers of whether or not a raise will be given. As of now, there are two types of raises that can be awarded at Treehouse:

1. Good Performance Increase

The key input to determining performance is the peer review process. The review committee will look at all the feedback compiled, and contextualize each individual performance within the company. People who perform well will be awarded with increases to their salary. We may also take into account other factors, for example student feedback. The Review Committee has established basic salary bands for each job role and when a salary increase is awarded, the person goes up to the next level. There is an eventual ceiling to the salary level for a job role. If someone wants more money once they've hit the ceiling, then they either have to change jobs to a more lucrative position (but they'll have to apply for the job like normal candidates) or leave the company.

2. Cost of Living Increase

Everyone who is performing well will receive a cost of living increase for their hard work. In Q1 of each calendar year, everyone that is performing at or above expectations will be awarded with an increase in their annual salary. This increase will most likely be based on inflation, but will also take into account market rates and conditions.

Confidentiality

It’s important to keep reviews confidential. This encourages more direct feedback. People shouldn’t share the content of their reviews with anyone other than the Review Committee. Sharing reviews with anyone outside this group will mean you’ll get an automatic official warning, and possibly be asked to leave Treehouse immediately.

Next time ...

I'll cover how we hire and fire, more detail on how we coordinate Projects and finally, Pros and Cons.

[Thanks to nickstone333 for the photo]

#NoManagers

My New Tattoo

I decided to tattoo things on my body that are core to who I am. My wife is the first on that list. Got the outlines done and today I'm going back for the color.

The Lion and Unicorn are from the British Passport and the Teacup symbolizes England, as she's from St. Helens, UK.

#tattoo

How to set priorities, create budgets and do project management in a #NoManager company

This is the second article in my series on why we removed all managers at Treehouse. Here are the other articles ...

Part 1

Why we removed our managers

What managers actually do

What really motivates people

Part 2 (this article)

How people choose what to work on

How priorities are determined

How Projects work and what tools we use

How budgeting works

Part 3

How career progression works

How compensation works

How reviews and discipline work

Part 4

The tools we use for communication (I only answer around 10 emails per day)

Future articles

The pros

The cons

The future

How We Transitioned to No Managers

Once 90% of the company voted to remove management, we started the task of transitioning the company to the new flat structure. The first thing we did was write a huge FAQ for everyone. We did this in Google Docs so people could comment directly in the doc and everyone could see their questions and our following answers. I'll cover the FAQ content below.

Once the FAQ had been written, Mike Watson created a detailed list of logistical things that needed to happen in order to transition successfully. Example: Who would be doing the backups of our video?

Here's a simplified version of our FAQ. It will answer many of your questions about how we operate as a #NoManager company.

Projects

Projects are the primary unit of work at Treehouse. Anyone can have an idea and propose a Project. Projects do not have to relate to the core expertise you were hired for. Example: A Designer could propose a project to teach a course.

How do Projects work?

If you have an idea ...

Open up Flow (our internal tool).

Click 'Propose a Project'.

Explain the Project goals.

Determine how you will measure success. We encourage you to use measurable statistics and metrics.

Choose a Focus Area (Education, Marketing, Finance, etc)

Add the Team roles that are necessary to complete the Project (Developer, Designer, Audio, Video, Data Scientist, etc)

Spread the word and try to recruit great people to your Project. A good idea is to create a post in Convoy (our internal forum) and ping people on HipChat (our company-wide chat tool).

People join your Project by going to the Project pitch and clicking 'Join'.

Once enough people join, hit 'Start'. If you don’t need anyone else to help, you can just begin, providing you’ve bounced the idea off people who need to know and starting the new Project will not hamper your ability to execute on existing Project commitments.

If you don't gain enough support for your Project you can click 'Abandon'.

Once your Project starts ...

Conduct an initial kickoff meeting with the new Project team

Once a day, everyone working on the Project needs to post a quick update on where they’re at with the Project and what % complete they are with their tasks. For example, if you’re the Designer, and you feel like you’re 50% done and the Developer feels they’re currently 0% done, assuming it is a two person team the average ‘completeness’ will average out at 25%. The average completeness for each Project will be posted publicly to give the whole company an idea of how complete each Project is.

After your Project completes ...

The team measures how successful the Project was and posts a post-mortem thread on the Project in Convoy (our internal forum).

The Project team is responsible for providing ongoing support and maintenance of that Project

Can I leave a Project before it completes?

If you want to move to a new Project, you chat to your current Project Team to let them know you’ll be moving on and then simply sign up for another Project. It’s not cool to leave your team hanging when they need you, and we would expect that poorly timed and communicated moves from teams would be reflected in your peer reviews.

How big can a Project team be?

This is naturally dependent on the nature of the Project. That said, it is in everyone’s best interest to keep the size of Project teams to a minimum. Remember our biggest costs at Treehouse are team salary and the opportunity cost of your time.

How many Projects can I work on at once?

It’s up to you, just don’t disappoint any of the Teams you’ve joined by getting behind schedule and dragging down the team. The importance of focus in creating quality cannot be understated.

Many of the folks at GitHub have blogged about how this is one of their biggest day-to-day challenges: over-committing. Better to over-deliver than under perform.

What happens if a team forms, and produces a Project that they all thought was a good idea. But when it's complete, it turns out to be of poor quality. Who decides if it goes live or not?

We cannot make a rule for this that will always work. There needs to be a robust QA structure in place but beyond that we’re relying on everyone’s good judgement to decide if something is shippable. Once it ships we need the Project Team to be measuring its success and reporting back on whether it succeeded or failed.

If I propose a Project, but there's not enough bandwidth, do I wait on Team Members to finish other Projects or convince others to join mine instead, or do I just have to join another member's Project in the meantime?

There will be a very small percentage of Project Proposals that actually get started. If yours doesn’t gain traction right away, then just jump into another Project or find something you can do on your own that uses your skills to best serve our Students and advance our Mission.

Where do I post my daily Project updates?

For each Project you’re working on, you need to do a daily update in Flow and include your % completeness.

It is vital that everyone posts daily updates on what they’re working on or this whole idea will fall down.

Will people ‘lead’ Projects?

Each Project Team will have it’s own way of working. Sometimes the best thing to do will be to elect a leader who makes sure everything is driving forward and organized, for example coordinating with teams outside of that particular Project or product. Other times, it may make sense to not have a leader and just divide roles and tasks as needed.

Some people are natural leaders and will automatically influence Projects because of their experience and charisma. However, no one is forced to follow anyone so only people how are actually good at leading will be 'leaders'. As the saying goes, "If you call a meeting an no one shows up, then you're not a leader."

How does everyone know what’s happening on other Projects?

You go to the Project page in Flow and read the status updates. If you need more info you can jump into HipChat (company-wide chat room). We discourage email as it creates information silos.

What tools do Project Teams use? (Trello, Asana, etc)?

After a Project has been started, it’s up to the Project Team to use whatever tool is best suited for their work.

Who prioritizes Projects?

There isn’t any top-down prioritization (unless we are required by law to act on an issue or some “red alert” type work is required, which should be rare). Each person will be prioritizing their todos based on maximizing their ability to advance the company-wide goals and Mission.

How do we spend money and are there budgets?

We want to be clear about something, moving to a flat structure does not mean everyone has carte blanche with Treehouse financial resources. There is one exception:

We are going to start off with no set budgets for Projects at Treehouse. If your team needs to spend less than $500, then you can go ahead and do it on the condition that everyone on the Project Team has unanimously approved it. This will probably mean that whenever you spend money, you have to file a claim through Expensify or you can request a cash allowance from the company. Project teams can spend up to $500 if unanimously agreed amongst the team.

If a Project’s spend increases or is expected to increase above $500 in aggregate, you need the approval of the Co-Founders.

Project spending will be listed publicly so we can all see who’s spending what. Remember, it is absolutely important that we exercise as much thriftiness as possible. When the company has more financials resources (is comfortably generating positive free cash flow) we will probably increase the thresholds for approval above.

Again, for any spending not related to Projects, for example travel, product based spending, non-Project related supplies, etc., you will need to get approval from the CFO.

What’s happening with our current top five priorities?

They have been deprecated. You all will be deciding your day-to-day priorities. The Co-Founders will be communicating their 50,000-foot view of the monthly priorities but they are just guides.

How do we make decisions?

We use our company wide goals, Mission Statement, and impact on free cash flow as a guide for decision making.

Who decides company-wide priorities? Who sets the general direction for the company?

Alan and Ryan (the Co-Founders) are actively steering the ship and setting company-wide goals, our Mission Statement and areas of focus.

What are the Co-Founder's roles in this new system?

Ryan and Alan are still very much leaders of the company. They will decide on company-wide goals, make sure our Mission remains relevant driving force, and keep our current areas of focus updated.

Next time ..

In my next post I'll be explaining ...

How career progression works

How discipline and compensation works

Pros

Cons

[Props to Nocklebeast for the photo]

#NoManagers

No Managers: Why We Removed Bosses at Treehouse

On June 20th 2013, we decided that our 4-day work week at Treehouse was't insane enough so we went further: We removed all Managers.

It was a bold move and one that not everyone was convinced of. We proposed to change the way the company operated and give all employees 100% control of their time and let them decide what they work on each day. From now on no one would tell anyone what to do, not even the CEO. (Me!)

This is not a new idea. Valve, GitHub, Gore Associates and Medium (and probably more) are all #NoManager companies. Knowing that someone has done it before us didn't make it any less daunting or even any easier. This is the story of how we did it, why we did it, the highs the lows and a few pointers for anyone thinking this craziness might be for them.

In a series of articles, I'll explain ...

Part 1 (this article)

Why we removed our managers

What managers actually do

What really motivates people

Part 2

How people choose what to work on

How priorities are determined

How Projects work and what tools we use

How budgeting works

Part 3

How career progression works

How compensation works

How reviews and discipline work

Part 4

How we communicate and what tools we use (I only answer 10 emails per day)

Future articles

The pros

The cons

The future

Why we Removed our Managers

We started the company in 2010 and operated in the normal command-and-control structure. By 2013 we had grown to 60 people with seven managers and four executives. As we added more people to the team, we noticed something disconcerting: rumors, politics and complaints started appearing.

Alan, my Co-Founder, and I started exploring possible solutions and considered removing the lowest layer of managers and asking them to go back into producing (which is what they were originally hired for). Then we went up the chain and asked hard questions about the value of the mid-tier managers, and then we kept going all the way to the executives at the top.

What if we removed all management and simply empowered everyone to choose what they do every day? We laughed at first and then the conversation turned serious. We had hired talented and motivated people. Did they need managers?

I can only speak from experience so I'll limit this to my journey being an employee at two companies and running four companies.

In my experience, managers started off as workers and then moved up the ladder, getting farther and farther from the front line. They gained power but slowly lost their touch with the day-to-day realities of talking to customers and actually creating solutions to their problems. The manager's team lost respect for them because they could no longer produce, which means they would set unrealistic deadlines.

Everyone was getting abstracted away from actually doing and instead focused all their attention on structuring.

As our team grew, we spent more and more time talking about priorities, aligning everyone and checking in on progress. The whole structure we designed was taking power and responsibility away from everyone on the front lines.

What do Managers Do?

In my experience, managers' responsibilities were ...

Communicating messages from top to bottom

Settling disputes

Managing careers

Keeping their teams motivated and happy

Shielding their teams from things they didn't think they needed to know

If we could find a way to replace the function of the managers and focus everyone on actually producing for our Students (customers) then it would actually be possible to be a #NoManager company. In my future posts I'll explain how we're doing this at Treehouse.

What Motivates People?

In my experience, people want to be amazing at their job. I can't count the number of times that people had really great ideas but were powerless to implement them. I watched as they went from zealous excitement to indifferent cynicism.

If you have 10 minutes, please watch this video by Dan Pink: Drive: The surprising truth about what motivates us. I think it sums up almost all my thoughts on why we decided to remove management.

Good managers act like servants to their team but far too many like the power and let it go to their heads. If Treehouse ever grows to 500 people, we'd need at least 50 managers. If we were starting to have morale problems now, what would that be like? Blurgh.

Go time!

Alan and I decided that if we were going to do this, the company would have to enact it by a majority vote.

The Treehouse Team is spread over the entire United States (with one person in the UK) so we do most of our communication in an internal forum called Convoy. We wrote an epic post on Convoy called Radical new idea: No managers at Treehouse, took a deep breath and hit the post button. The whole company ground to a halt for two days as 447 comments were posted, upvotes and downvotes were cast and passionate opinions flared.

After two days, we did a company-wide Q&A over video and at the end we asked everyone to vote via an online form. The votes flooded in and over 90% voted to go flat.

It was go time. Now the real work would begin.

Next up ...

In the next article, I discuss ...

How people choose what to work on

How priorities are determined

How Projects work and what tools we use

How budgeting works

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