I read 『爆速成長マネジメント』イラッド・ギル（著） (High Growth Handbook by Elad Gil), so I’ll share the insights I gained from the book.

Background: Recommended Reading for Managers

I had finished reading this about a year ago, but since it became a recommended book for managers within our company, I’ve decided to publish these reading notes now, albeit belatedly.

Below are quotes and notes from sections that left an impression on me.

Chapter 1: The Role of the CEO

On Co-founder Role Changes

The biggest impact in management restructuring comes from changing co-founder roles. In most early-stage startups, all co-founders are involved in every decision. As the company grows, it becomes necessary to more strictly define the scope of decision-making and each person's role.

? About co-founder role and function changes

There are basically three outcomes waiting for co-founder role changes: • The co-founder changes to being involved as an individual rather than management and lives happily in that role (Apple's Steve Wozniak). • The co-founder remains in the company as key management, continuing to contribute to company growth as CTO, President, Vice President of Product, or other positions. • The co-founder leaves due to dissatisfaction with decreased influence in the company. This occurs when they want to become CEO eventually but don't see immediate prospects, or when there's a mismatch between their desired role and skills. In some cases, they leave due to family circumstances like caring for sick family members or moving due to spouse's situation.

? Three outcomes of co-founder role changes

Chapter 2: Board Management

Selecting Independent Directors

4. Don't hesitate to take time to get to know candidates. Investors will pressure you to decide on directors quickly. However, don't hesitate to spend months finding the right person. Just like you wouldn't hire an incompetent engineer as a stopgap measure. Directors are harder to remove than employees, so you need to approach this more carefully. I recommend organizing topics to discuss with director candidates in advance. • Discuss the company's direction. Are they aligned with the vision and approach the founder wants to realize? Can you gain important insights or interesting feedback? • Talk about how they'll contribute. What areas will they actively engage in? What are their strengths and weaknesses? • Discuss goals and prospects. What does the candidate want to achieve in their career and life? How will serving as a director impact those goals.

? Methods for getting to know director candidates

5. Confirm personal trust relationships and attitude. (omitted) Be cautious of director candidates who show these attitudes: • Condescending older management executives who treat founders like "kids" and consider themselves "adult supervisors." Being misled by such people can lead to misjudgments, founders being removed from CEO positions, or CEOs being replaced with "administrators" without vision. • Micromanagers who mistake the director role for being the founder's boss. • People more focused on monetary rewards from positions than interest in business growth. • People whose goal is becoming a director. Those who think being a director increases their prestige or who start acting to become directors of multiple other companies using this appointment. • People who want to build connections with the company's investor group may betray founders to please investors in worst-case scenarios. • VC pawns. (Note) explains this in detail. This happens frequently enough to be called "director commonplace" and requires separate explanation due to its importance.

? List of concerning director candidate types

Chapter 4: Building the Management Team

INTERVIEW: Hiring, Managing, and Firing Executives

When hiring executives, it's desirable to look for people with experience for what you'll need 12-18 months ahead. Thinking shorter term doesn't align hiring costs with expansion speed. Thinking longer term means hiring overqualified people for the work to be done, making them unsuitable for the job content.

? Executive hiring should be for 12-18 months in the future

Reference checks will give you that answer. Also, when hiring executives, you should conduct thorough reference checks. While I can understand why regular employees don't get extensive reference checks, there's no reason why executives should be hired without thorough reference checking. What you must ask in reference checks is "If this person joins our company, would you also join?"

? The essential question to ask in reference checks is “If this person joins our company, would you also join?”

Gil: I often tell founders that it's okay to fail when hiring executives. Fear of failure prevents action. What should you look at to judge if an executive is functioning well? Also, how quickly can you notice signs of failure?

Rabois: With executives, you can generally tell within 30 days, and you’ll know for certain by 60 days. Of course, this varies depending on business complexity.

? Executive hiring failures are acceptable.

The role of the CEO or founder is to support them so they can succeed. Consider support as an obligation and do everything possible to help new executives succeed. Unfortunately, some founders don't do this. They think "I hired excellent people, so they'll push their work forward on their own." I think spending 10-20% of your schedule helping new executives adapt is clearly a valuable initial investment.

? The founder’s role is to support executives so they can succeed.

If you aim for zero hiring failures, that's equivalent to zero decision-making failures, which is too conservative. As a VC, I tell portfolio companies to move forward when they're 70% confident about hiring an executive, and I personally agree with that opinion. Below 50% is reckless. But 100% is too cautious, and you might be losing candidates. Failure rates decrease, but opportunity losses also occur frequently. Not many people set metrics for opportunity losses from missing people they should have hired.

? Zero hiring failure rate is too conservative.

Gil: How many executive hiring failures are acceptable? Is it a certain number of failures per position? Or the total number of annual failures?

Rabois: About once, I think. There aren’t that many opportunities to increase executives, and most companies probably hire one to three people in a set period. If you make multiple hiring mistakes, you should question the hiring process itself. One failure is normal.

? Executive failures are acceptable up to once per year.

Gil: I think the biggest fear for founders when restructuring teams is employee turnover risk. They worry that employees will quit when they insert someone between themselves and direct reports or bring in external talent. How can this problem be avoided? Should it even be considered a problem? Maybe turnover isn't actually problematic?

Rabois: Turnover risk is troubling and causes founders to postpone decisions. When creating hierarchy and inserting people, it’s best to do so only when that new person is clearly superior.

? The biggest fear for founders when restructuring teams is turnover risk

Chapter 5: Organizational Structure During High Growth

The job of "gap filler" that fills organizational holes

? Gap fillers

Chapter 8: Fundraising and Valuation

INTERVIEW: Reasons for Going Public

Gil: (omitted) Recent founders aren't very positive about going public. What do you think about the pros and cons of going public and becoming a public company?

Rabois: My thinking is very simple - I think you should go public as early as possible. Fulfilling responsibilities as a public company and making transparent information disclosure is beneficial for the company. This is what I always tell management. The process of preparing for public offering creates internal discipline and increases focus on business. Also, IPO opens up various possibilities. Once you go public, many tools and methods become available when fundraising, acquiring, or doing M&A.

? It’s better to go public as early as possible.

Chapter 9: M&A

INTERVIEW: Scaling Responsibly for Users and the World

Until now, the goal was to scale at all costs. Silicon Valley has always been committed to supporting hacker entrepreneurs who can improve products quickly even by breaking existing things. However, this "scale at all costs" mindset doesn't align well with creating responsible businesses in areas that significantly impact people's daily lives. I want to support entrepreneurs who think it's important to deeply understand customer needs and provide products responsibly, even if it means sacrificing some growth.

? The “scale at all costs” mindset doesn’t align well with businesses with significant social responsibility.

Traditional large companies serving big markets have a sense of social responsibility. Today's Silicon Valley startups need to bear their own version of social responsibility. I believe this means transparently communicating about algorithms and machine learning used in products, and having measurement systems to verify whether corporate success isn't based on discrimination or prejudice.

? Startup version of social responsibility = transparent communication about technologies used

That’s all from the Gemba, where “High Growth Handbook” is recommended reading.