The primary goal of the Single-Threaded Ownership (STO) model is to ensure that our best performing individuals have maximum direct impact on our customers and our business.
The primary goal of the STO model is to ensure that our best performing individuals have maximum direct impact on our customers and our business. Delegating ownership and accountability to our leaders is how we empower them and help them grow, and is also how we ensure that Hopper remains a fast moving and scalable organization as more people join.
The term “Single-Threaded Owner” (abbreviated as STO) was coined at Amazon and is a nod to programming, meaning that the leader is not expected to multitask. A single-threaded owner is someone who wakes up and just worries about one thing.
If you are the STO for something, be it a product or a line of business
This is simple enough, but most modern organizations do not follow this principle.
Most technology companies are organized as a matrix, with large functional teams, such as engineering and data science, that offer shared services to various product and business owners. This implies a lot of resource prioritization and collaboration across different teams, that leaders often work on multiple projects at the same time with multiple stakeholders and often the accountability for a product or project is diffused across the organization.
This is what makes working at Hopper unique: all leaders are expected to operate as STOs.
Leaders are not general managers; they are owners. Leaders dive deep and no task is beneath them. They are expected to be “full-stack” with the technical, product, data and people skills required to lead high-performing cross-functional teams.
This is immensely important at Hopper because single-minded focus is how we invent — the best way to fail at inventing something is by making it somebody’s part-time job. Once a leader has a singular focus, they can build the right team. This usually begins with one or two technical people, just enough capacity to begin building, to quickly iterate and deliver something new to the customer. When a product or feature finds product market fit, single-threaded owners are free to scale their team and grow the idea into a material business.
With single-threaded ownership one person is singularly accountable for delivering the expected results of a business unit, product or feature. Ownership is how nearly all invention happens and is why startups successfully innovate while large companies fail. By avoiding group decisions, matrix structures, and multiple levels of approval, Hopper is making the statement that we trust our leaders to choose the right goals, build great teams, and deliver results. Ownership is the ultimate form of empowerment.
Single-threaded ownership also enforces focus on the customer and innovation. Leaders are owners, who don’t need to hold large meetings, gather internal support or build consensus, thus freeing up time to focus on what really matters: innovating for the customer and building revenue for the company. Your job as a single-threaded owner is to live and breathe that one product or feature. You may not have invented it, but you are entrusted with its future.
At Hopper we deliberately avoid the matrix organization structure. Most of our organization is set up to avoid shared services. For example we don’t have company wide engineering, data science or design groups. Rather all of these specialized resources are nested directly within the various STO teams and report into the leader.
We organize our entire company into teams that are no larger than 12-15 persons, each with a single leader/owner who is accountable for the output of the team. To avoid adding undesired layers of middle management, we even have an expectation that leaders will have at least 6 direct reports each.
It’s not a new idea that smaller teams are better — one of the most scalable structures in history was the Roman army. Throughout its history, the basic unit of the Roman Empire’s army was an 8-man group called a contubernium. Why 8? Simply because 8 is the number of soldiers that fit in one tent. With this fundamental team structure within the Roman legion, they were able to dominate 500 years of history and create a distributed network that ruled the Western world.
To see why this is important we need to understand what happens when groups of people get together to collaborate towards a common goal.
There is a study conducted by three professors from UCLA which involves building stuff with LEGOs. In the experiment, the professors used LEGO bricks and two teams made of 2 and 4 people. The goal was to see which team could build a specific LEGO structure faster and better. The team consisting of 2 people accomplished the task in 36 minutes, whereas the 4-person team finished in 56 minutes. This is an example of something called the Ringelmann Effect, which says that individual members of a group tend to become less and less productive as the size of the group increases. The Ringelmann Effect was discovered by French agricultural engineer Maximilien Ringelmann. He ran an experiment which left twenty students both alone and in groups on a five-meter rope, with the other end tied to a dynamometer. When two people pulled together on the rope, each individual performed on average only 93% of what they had achieved alone. With three people on the rope, performance dropped to 85%, and with four it dropped even more to 77%, until, in a group of eight people, everyone only provided an average of 50% of their highest performance.
The cause of this phenomenon is simple: the more people you have on a team, the more time it takes to align them with your thought process and the less accountable each individual feels for the output of the entire team.
At Hopper we deliberately avoid the matrix organization structure. Most of our organization is set up to avoid shared services. For example we don’t have company wide engineering, data science or design groups. Rather all of these specialized resources are nested directly within the various STO teams and report into the leader.
We organize our entire company into teams that are no larger than 12-15 persons, each with a single leader/owner who is accountable for the output of the team. To avoid adding undesired layers of middle management, we even have an expectation that leaders will have at least 6 direct reports each.
It’s not a new idea that smaller teams are better — one of the most scalable structures in history was the Roman army. Throughout its history, the basic unit of the Roman Empire’s army was an 8-man group called a contubernium. Why 8? Simply because 8 is the number of soldiers that fit in one tent. With this fundamental team structure within the Roman legion, they were able to dominate 500 years of history and create a distributed network that ruled the Western world.
To see why this is important we need to understand what happens when groups of people get together to collaborate towards a common goal.
There is a study conducted by three professors from UCLA which involves building stuff with LEGOs. In the experiment, the professors used LEGO bricks and two teams made of 2 and 4 people. The goal was to see which team could build a specific LEGO structure faster and better. The team consisting of 2 people accomplished the task in 36 minutes, whereas the 4-person team finished in 56 minutes. This is an example of something called the Ringelmann Effect, which says that individual members of a group tend to become less and less productive as the size of the group increases. The Ringelmann Effect was discovered by French agricultural engineer Maximilien Ringelmann. He ran an experiment which left twenty students both alone and in groups on a five-meter rope, with the other end tied to a dynamometer. When two people pulled together on the rope, each individual performed on average only 93% of what they had achieved alone. With three people on the rope, performance dropped to 85%, and with four it dropped even more to 77%, until, in a group of eight people, everyone only provided an average of 50% of their highest performance.
The cause of this phenomenon is simple: the more people you have on a team, the more time it takes to align them with your thought process and the less accountable each individual feels for the output of the entire team.
Our customers only care about their own experience with our products and services, they are totally indifferent to how hard we worked to build them, who built them or what our process was. This concept may seem self-evident, but as organizations grow there is a natural tendency to put a large amount of emphasis on work and internal processes: meetings, project plans, internal documents, presentations, specifications, etc. At Hopper we refer to anything that isn’t the customer using the term “proxy”. Use of the term proxy is intended to remind us that although this thing may seem important to us internally, our customers don’t really see, understand or care about it. Proxies include internal processes, other teams or employees, other leaders, investors, auditors, the board of directors, etc. If you get distracted by these sources of information or start prioritizing based on inputs from these groups, we say that you are “managing to proxies”. This is of course a bad thing, as it is a symptom that as a leader you have lost their customer focus and will start to distract your own team and they will in turn lose focus.
All leaders need to invest some time in effort performing work that satisfies proxies – there is just no way to run a functioning organisation otherwise. But as a leader you must remember that these entities are not your customer and any time, effort and energy spent on these items can’t be used to build something that is actually customer facing. It is your job to spend an absolute minimum amount of time on proxy work, and a maximum amount of time on things that directly impact the customer.
It may seem like we are creating a harsh and cold working environment by cutting down communication, devaluing our own organization and only valuing results. But in reality these rules are in place only as a means to an end: the only goal of these mechanisms is to confer a maximum amount of autonomy to our leaders. Day to day you will find that following these rules empowers your leadership, even though they might appear as constraints at first view.
As a single-threaded owner at Hopper you have:
It may seem like we are creating a harsh and cold working environment by cutting down communication, devaluing our own organization and only valuing results. But in reality these rules are in place only as a means to an end: the only goal of these mechanisms is to confer a maximum amount of autonomy to our leaders. Day to day you will find that following these rules empowers your leadership, even though they might appear as constraints at first view.
As a single-threaded owner at Hopper you have:
• The ability to set your own goals and decide what metrics are important to track
• The option of hiring your own team and change it’s composition at any time
• Direct control over all resource allocation and priorities within your team
• Direct ownership over the P&L of your business
• The ability to grow your team to any size (if you generate the revenue to fund it).
You also are not required to coordinate with any external teams and you can make most decisions without talking to the leader you report to. This level of autonomy is uncommon in larger companies simply because most are matrix organizations that impose a set of constraints that strip their leaders of autonomy, and often limit their ability to have impact.
Single-threaded ownership deliberately creates an environment that closely emulates that of a good startup: a small team of highly functioning individuals that are singularly focused on building something disruptive that will deliver new value to customers. By choosing this operating model, we have rejected the commonly held view that as a company gets bigger it will inevitably become slower and have a harder time innovating. We expect our teams to act every day as if we had just started the company, no matter how large and successful the company has become. And we back up this expectation by giving our leaders almost unlimited autonomy and accountability.
You can easily achieve a day-one mindset by adhering closely to our core values: always put the customer first, never slow down, never stop innovating because what we have is “good enough” and never think that is ok for revenue growth to slow down – at any scale or any time.
Revenue growth is directly related to how successful our products are with our customer, and there is no automatic relationship to how hard or how long a team worked on a particular project. This is why we don’t actually reward the amount of work that is performed in a team, but instead choose to focus on the impact of that work on the customer and the revenue of the company. As a single-threaded owner you will be held to this same bar: we only measure the performance of leaders by their ability to impact the customer and build revenue. Your performance won't be measured by what your team does or how it does it, but what actual impact your team has on our customer and revenue growth.
This is the fundamental contract that underpins single-threaded ownership: you have full control and autonomy, but you are expected to consistently deliver measurable results. To increase your chances of success, we have developed a series of tools, mechanisms and conventions that are designed to help you build customer focus and shipping cadence.
This model isn't without downsides. First of all, it’s not for everyone. Many people who aspire to management positions are just uncomfortable with the level of transparency and responsibility that comes with single-threaded ownership. Others are just incapable of performing some of the basic functions required of a leader in this model, such as recruiting a strong team or diving deep into problems and making autonomous decisions.
It is also much harder to be a leader in this environment. The bar is higher because this leadership model requires a broader skill set, similar to being the founder of a startup. A single-threaded leader needs to be able to think deeply about business problems, understand technology, develop an instinct for how products solve customer problems, build estimates and forecasts and recruit and manage a team.
Running an organization with very few rules and processes is also more chaotic. Reed Hastings refers to this as “managing on the edge of chaos”. Single-threaded ownership leads to some complexities like duplication of work and it creates a higher burden of making sure that functions like infrastructure and security are built in a sustainable manner. But overall at Hopper we have found that the benefits by far outweigh the costs, because this model lets us scale while keeping our customers at the center of our thinking and it allows us to build products quickly and more efficiently, and this in turn has led to much stronger revenue growth.
We intentionally designed our culture to give leaders ownership and autonomy, empowering them to make decisions based on a set of guiding principles and tenets to achieve maximum impact for the customer.Sounds like a fit? Check out our open roles!
