Today I listened to an entrepreneur discuss how to manage a challenging team member. This founder is seasoned and has a great grasp on his business. But even with years of experience, human resource issues still consume lots of his time and energy. A few thoughts on this topic:

• CEO multiplier – By the time a human resource situation gets to the CEO’s desk, it’s usually many times worse than what’s being communicated. It’s probably been a concern longer than people are acknowledging.
• Culture – Is the person a culture fit? Rank them against your core values to find out. If the person isn’t a good fit but your core values don’t indicate that, it may be time to rethink your core values. Getting core values right and incorporating them into the hiring process is preventive maintenance.
• Time and energy – If one person consumes a ton of leadership or management time and energy, that’s a red flag. Every time I racked my brain about what to do with a particular team member, they ended up leaving despite my best efforts.
• Custom roles – It’s usually not a good idea to create a custom role to placate someone. It’s a temporary Band-Aid and a horrible example for the rest of the team.
• Coaching – Listening to a team member describe what they think they need can be a productive conversation. Sometimes it highlights diverging expectations or a mismatch between the professional development the person needs and what the company can offer. But other times it suggests simple changes that can get the relationship back on track.

All companies, regardless of size, contend with human resource problems. It’s an inevitable part of managing people. How you handle these situations is important—it speaks volumes about the company to both outsiders and your own people.

I was asked about my experience using offshore talent today. The use case we discussed was specific, but I think the things I shared could be helpful to others considering something similar:

• Nearshore vs. offshore – I have experience nearshoring in Nicaragua and offshoring in a few countries, including the Philippines and Poland. Both worked well. Nearshore talent may better understand American culture and usually the time zone difference is insignificant. Some of our team members in Nicaragua had lived in the United States for extended periods. For these reasons, nearshoring is good for customer-facing roles like customer service.
• Execution – Outsourcing works only if you have processes and systems already in place. What you do and how you do it need to be well defined. If every operational situation is a one-off exception or figured out on the fly, your operations aren’t consistent and your processes are minimal. This might work for in-office hires who can learn on the job. But it will be extremely difficult, if not impossible, to train resources in another country how to execute up to your standards. Without processes and systems, you’re setting the team up for failure.
• Education – Talented people are available for nearshore and offshore work. I worked with some intelligent men and women who had advanced degrees. They can usually do whatever you want if you help them succeed with proper training. If you want more-qualified or more highly educated people, just ask. Usually, firms can accommodate this kind of request if you’re willing to compensate these individuals appropriately based on their qualifications.
• Consistency – Most nearshore and offshore workers and firms value consistency. If you can provide steady work, it will go a long way toward earning loyalty. If you plan to dial people up and down constantly, expect turnover and inconsistent execution.
• Hiring – I initially let outsourcing firms do the team selection, but that didn’t go well. We got some people who weren’t well suited to their roles, and turnover was a problem. I eventually let the firms offer up candidates whom we would interview. The caliber of talent the firms offered went up. (I assume they had a better understanding of our standards.) I suggest sticking with your usual hiring process (with modifications) when you outsource. Misfires are time-consuming and costly with outsourcing, just like they are when you hire locally. Take the time to interview candidates and say no to bad fits.

I hope some of you find these points—which I learned through trial and error—useful. Tons of firms can assist with outsourcing and lots of information is available online. Outsourcing isn’t a silver bullet, but it can be helpful in scaling functions that have defined processes

It was a personal problem that led me to start my company. (Many founders would say the same.) Back in high school, I wasn’t able to find the auto parts I needed. After doing a ton of research, I eventually sourced what I needed. I used my new knowledge to solve the same problem for friends, which led to a side hustle in high school and college.

I was thinking really small then. How can I make some money and help my friends out? After some exposure to bigger thinking in corporate America, I realized it wasn’t just my friends who had this problem—I could solve it for many people. That realization led me to start CCAW, which focused exclusively on automotive parts.

In hindsight, I wish I had thought even bigger about the problem we were solving. We used technology to connect consumers to the auto products they desired. But the same accessibility problem exists in numerous industries. I was so focused on the automotive space that I couldn’t see the forest for the trees. We might have been able to use our technology, with modifications, to solve the broader problem in other industries.

If you’re a founder solving a problem you’ve had yourself, take a second to think about it more broadly. It may not change what you do in the short term, but it could inform what you do long-term. You just might stumble upon an innovative long-term vision and huge market opportunity.

I’m always interested in hearing how founders started out. Today, I talked with someone who recently exited. She had a great origin story.

In the beginning, she had a growing family and couldn’t afford to put her own capital into her idea. And she didn’t know how the investor world worked. She turned to the tools at her disposal. Her idea required physical space to provide instruction. She went to venues that were entering their slow season and negotiated to split revenue from courses in exchange for using their space. No upfront payment required. Using Constant Contact, she began emailing people in his network and offering the service. She built a free professional-looking webpage for registrations.

The registrations and turnout exceeded expectations. The cash from that one event was enough to make a down payment on his own building, and things took off from there. Eventually she scaled the business to over one hundred locations before selling it recently. All with no investors or other external capital.

This is a great story of hustle and making the most of the resources available to you, even if they’re far from ideal. Play the hand you’re dealt and play it well, even if it looks bad, and you can still win the game.

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Over the years, I’ve noticed a pattern. Some people thrive in the early days of a start-up. They love being an early team member and turning an idea into reality. The lack of structure, wearing multiple hats, and small team dynamics appeal to them. They love solving hard problems and building something new. They’re aware the business could fail, but they’re comfortable with that risk. As the company scales, roles become more defined, and structure is added to the company, the experience is less enjoyable for these kinds of people, and they may leave.

These people are critical to the start-up ecosystem. They make great team members early on. Some people see their lack of interest in staying with the company as it matures as a negative. I see it differently. They know what environments are ideal for them and they seek out opportunities that align with that. Sure, that means they may stay only a few years, but that’s OK. Their strengths lie in helping the company overcome early obstacles and achieve product–market fit.

As companies grow, their needs change. The skills needed for, say, international expansion are utterly different than those needed to go from an idea to landing the first customer. What’s required of the team evolves as the company pursues bigger goals. Some people will evolve with the company as it matures, and some will pursue other opportunities. Either is OK. The most important thing is to recognize what stage a company is in and get the people best suited to help you make it to the next one.

For some founders, identifying the exact problem they want to solve is a challenge. They know they want to start a company, but they’re not sure what it will do. There are lots of ways to approach this. If you have experience in a space, think about the pains you and your coworkers have experienced. Or talk to potential customers to learn what problems they have and how troublesome they are. Or consider this unique way to identify a problem you’d like to solve: going for interviews.

Let me explain. A founder I met with has an extensive track record in a space that’s niche but growing. She’s been part of teams that have accomplished greatness. Pondering her next move, she began interviewing with firms in her industry. Over a series of interviews (and job offers), she noticed that employers were interested in her experience solving a particular problem. And she learned that it’s a problem that’s both common and severe across the industry. Most companies are actively recruiting people to build an in-house solution. After hearing this multiple times, she realized there’s an opportunity to build a large company focused exclusively on solving this pain point. I’d never heard of anyone going for interviews to find the problem their start-up will solve, but I love the idea.

If you’re experienced in a space and want to start a company, consider interviewing to let others tell you what big problem you’re well suited to solve.

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Today marks the end of my forty-sixth week of working from home (mostly). Here are my takeaways from week forty-six:

• Tools – I often look for tools to help make me more efficient. I was reminded this week that I should take the time to learn the tools I use. A great tool that isn’t used properly is of limited usefulness.
• Accountability – We don’t always want it, but we always need it. Another reminder this week: accountability is key to outsize success. I do a decent job holding myself accountable, but I push myself more when I’m accountable to someone else.      
• Culture – I had a great conversation with a friend about how working from home will affect company culture. I believe that workforces working from home exclusively or for long periods will have a negative impact on culture. My friend does too. I’ll be watching this and discussing it with company leaders throughout the year.

Week forty-six was a hectic one. It’s over now. Whew!

One strategy for acquiring customers I’ve heard early founders mention is to use marketplaces. Think Upwork, Etsy, Amazon, eBay . . . There’s lots of demand waiting on these platforms if you can provide what users are looking for. This strategy has merit and can be useful, but there are things to consider:

• Customer relationship – The relationship is often between the customer and the marketplace. The customer is loyal to the marketplace, not the merchant or vendor who provides the good or service. Some marketplaces even restrict merchants from doing offline transactions with customers they acquired on the marketplace.
• Learning – In the early days, it’s important to get feedback from customers and fine-tune your product to achieve product–market fit. Not owning the customer relationship can make that difficult.
• Why – Marketplaces don’t usually share data about what’s driving behaviors on their platforms. Vendors seeing what’s happening but they don’t understand why it’s happening. Not a big deal if things are going well. Terrifying if things are going badly. It’s hard to fix something if you have no idea what’s broken. And growth planning is extremely difficult because you don’t know what drives your growth.
• Expansion – When you talk with your customers, sometimes you learn about opportunities to add value. It’s the land-and-expand approach. Get your foot in the door and grow the relationship over time. This is difficult to do with customers acquired via marketplaces. Not impossible, but difficult. Instead of growing by selling more to existing customers, you have to constantly acquire and service new customers.
• Experience – Marketplaces often control the experience for customers. The experience is built for the masses, so it may not be an optimal customer experience.

Marketplaces are great for tapping into demand and supporting a thought-out go-to-market strategy. They aren’t a replacement for a go-to-market strategy and they aren’t ideal for all company stages. Founders (especially early ones) should be mindful of the importance of owning the customer relationship and factor it into their decision about whether to acquire customers via marketplaces.

Most start-ups fail because they run out of cash. They can have great press, a great product, and even customers . . . but still run out of cash. Understanding the cash situation is the founder’s responsibility. At CCAW, I received a cash flow report every morning. I always knew exactly how much was in the bank, down to the penny. Cash is a company’s oxygen. When you run out of oxygen, you suffocate.

In the early days of a start-up, the founder is responsible for cash. If investors are the sole source of it, the founder pitches to investors. If customers are the sole source of it, the founder sells to customers. If cash comes from both sources . . . you guessed it, the founder is pitching and selling. Absent product–market fit and a defined sales process, the founder is the rainmaker who keeps the bank account in the black.

Raising capital is a core part of the job for early founders. If you’re considering starting a company or you already have, take this responsibility seriously. If you don’t, your journey will be short.

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Yesterday I talked about the importance of founders simplifying their pitch. I didn’t mention another critical aspect of pitching: founders should convey their passion when they pitch. I’m not talking screaming or doing anything inappropriate. Just make it clear how much it means in a way that’s authentic.

Founders are evangelists for their companies. Especially in the early days. They’re who will get others excited about buying from the company or even joining it. Effective evangelism requires passion and enthusiasm, both of which convey conviction. Founders often lay everything on the line to start a company. When they pitch, their listeners should understand that the venture is so important to them that they’ve taken on an almost incomprehensible level of risk.

If you’re a founder or want to be, make sure your passion comes through in your pitch (in a way that fits your personality). If people can’t tell you’re excited about your company, it will be hard for them to get excited.