a picture of a notebook sitting on a wooden table. The notebook is open, with a pen sitting in the binding's crease between pages. This image is to suggest people document things better.

How to act like a VC-backed startup (#9: Create copious documentation)

Dave Labowitz Scale

a picture of a notebook sitting on a wooden table. The notebook is open, with a pen sitting in the binding's crease between pages. This image is to suggest people document things better.

“Create copious documentation” is the ninth part of a twelve-part series. It’s a deep look behind the scenes of the “business playbook” that makes VC-backed companies successful and how to apply these lessons to your business.

  • If you’re looking for the introduction to the series and first article, please click here.
  • If you’re looking for other articles in the series, links are at the bottom of this article. Enjoy!

9. Create copious documentation

I know, I know, creating documentation is boring and time-consuming. It always seems that the time spent documenting things: code, process, meetings, etc., is better spent on something else. I get that everyone is busy and you’re always under deadlines. But this is not a good reason to ignore documentation. 

VC-backed companies put a fair amount of weight on documentation for four good reasons.

Documentation helps training

First, the more documentation you have the faster and easier it is to train new team members. Onboarding team members is expensive because of the carry costs involved. If it takes three months for a new team member to come up to full productivity, the salary you pay them over that three months is basically an investment in their training. If you have enough reference material, you can shorten this carry period by 30% or more; the focus can shift from teaching them where to look for answers rather than teaching them all the answers up front.

Similarly, the more documentation you have, the less hand-holding will be required from your more senior team members during the training process; your new team member will be able to refer to documentation before asking others for help. 

Documentation is an insurance policy

Second, if you have copious documentation in place it hurts a lot less if you lose a key team member unexpectedly. If a team member quits suddenly or, God forbid gets hit by a bus, it can be devastating to your productivity. What if everything they know is in their head? If you’re in business long enough it’s not a matter of if this will happen but when. It’s hard to transition a new hire into a suddenly vacated role! I’ve spent far too much time poring through files in a shared drive and reading year-old emails. If we had better practices in place regarding documentation this process wouldn’t have been nearly so time-consuming!

Conversation and meeting notes improve communication

Third, documenting meetings and conversations is a great way to improve communication. Think about it: every board meeting has minutes. Why? Because it’s an important meeting so we need a written record of it. Shouldn’t every meeting be important? If it’s not important, why spend the time and money on the meeting in the first place? It stands to reason, then, that you should document every meeting… otherwise just cancel it. 

I’ve turned the term “copious note” into a verb in several companies. When we start going in a meeting, I’ll suggest that someone “copious note” the meeting. This means for that person to document who was there, what was said, and any to-do items committed to during the meeting. The copious notes are then emailed out to all meeting attendees afterwards. This works great for many reasons:

  1. No one pays attention all the time. It’s inevitable that your team will get distracted by email or a text, disengage to look something up, get caught in a side conversation, or just lose their focus during every meeting. Getting the meeting notes after the fact will help them fill in the gaps when they were distracted.
  2. Written meeting notes ensure that everyone has the same takeaways. If I misunderstand something in a meeting which clashes with the notes when they come out, it’s incumbent on me to follow up for clarification. This can save a lot of costly mistakes.
  3. If anyone is unable to attend a meeting you can send them the meeting notes and they’ll have a pretty good idea of what took place. And, of course, if you signed them up for any tasks in their absence (good penance for missing the meeting!) then they’ll know what’s on their plate.
  4. The note-taker role has inherent value in a few ways. First, if there’s an ambitious team member looking for ways to stand out, taking great meeting notes is a good way to get noticed and be part of the discussion. Remember, any questions about the notes will come to that person. Second, if no one in the meeting wants the responsibility, it’s an opportunity to pick a more junior person to come in, listen, and take the notes. This is great experience for an intern or other junior team member to get some more senior exposure without being a distraction.
  5. Unfortunately, good documentation is required to write up or terminate a problem team member. If they’ve been difficult in meetings, the written record can help detail out the case for discipline and/or dismissal. 

As a final tip on meeting notes, consider experimenting with a rule that the meeting notes are the responsibility of the person who calls the meeting. If you feel like there are too many meetings, this is a good experiment to see how many of them are unnecessary! If people don’t feel like typing up and emailing notes then they’re free to not schedule that not-so-important-after-all meeting.

Documentation makes you saleable

Finally, VCs know that someday they’re going to sell the company. Most acquiring companies will do extensive, exhaustive due diligence before consummating the transaction. Working your way through a diligence checklist is onerous enough without having to do a mad-dash scramble to document all your key processes and/or code. Keeping in mind that you may have to do the documentation in order to sell the company, anyway, why not jump on it now and get the benefits described above along the way?

Like all infrastructure-oriented work, documentation costs time up front but pays large dividends down the road. It’s like an insurance policy. It’s no fun to pay for insurance, but you thank your lucky stars when you have it! If you plan on your company being around for a long time and even someday being sold, if you find the time to invest in documentation now it will pay off in the long term.

This series will continue soon with Part 10.

Other articles in the VC-backed startup series are: