I have a couple of hours before I go off to start the festivities for ringing in the New Year. One could argue that one day is very much like the other, but the beginning of the new year is special - it is so in the minds of a few billion people and all that psychic energy has to count for something.
I'm not a big fan of 'resolutions', but I always have some sort of a continuous improvement program going on aiming for growth along multiple dimensions. Looking back on 2006, I must say it's been a pretty good year. Apart from the health and family goals (check on both fronts), I've managed to make a lot of new friends (social) and saw a huge spike in my 'giving back'. The blog's helping me work on something creative, even if it's just a little bit, and launching my venture has not only got me back where I'd like to be (in the startup world) but it's also added the extreme satisfaction of doing something that could help people as well as bring shareholder value. It feels good.
I believe it was Gandhi who'd said that happiness is having what you think, say, and do in harmony. It's not for nothing he was called the Mahatma.
Mine or yours
Or, more specifically, should I work on my startup idea or yours?
There are a lot of people who have a startup idea or two in their backpockets. They take them out frequently, give them a rattle and whirl and see if they settle into something they should go after. Maybe the answer is not always clear. So these folks take the scenic route - see what other people are doing by way of startups. On the surface, the plan seems reasonable. After all, if they come across something compelling, they can put their own ideas on ice and go work on this startup that already has something going for it - i.e, someone's made a commitment and it is no longer languishing in the idea zone.
As an entrepreneur in hiring mode, I do run across these people every so often. In fact, many of them trot out their having an idea as proof of their entrepreneurial bent and startup interests. (A very few open, confident souls share their ideas with me - and in return get helped with advice and useful contacts. Those who don't make me briefly wonder if they're competing in some way, but I don't waste cycles on that.) Color me skeptical, but I'm just not convinced that this is a great way to go about validating an idea. My own ideas took time to develop, and I went about doing that by directly approaching people who I thought could give me useful feedback on the idea, on startups, markets, whatever, but I would never waste my time (or anyone else's) interviewing for a job when I had my own idea was itching for attention.
I've tried to understand this approach as obviously quite a few people use it. And realized it may go back to the passion thing. When you're not consumed by your idea, you're open to shopping around. You want to check out the field because you're not ready for commitment. It is possible the browsing helps a few people figure out that their idea is worth something after all. But there is a better, and more direct way. If you have your own idea, just work on figuring out if it's worth pursuing - many entrepreneurs will be happy to help. Don't kid yourself that you're really open to a job at another startup and you can do an interview - you're going to think that 'mine' trumps 'theirs' anyway. Human nature and all that.
There are a lot of people who have a startup idea or two in their backpockets. They take them out frequently, give them a rattle and whirl and see if they settle into something they should go after. Maybe the answer is not always clear. So these folks take the scenic route - see what other people are doing by way of startups. On the surface, the plan seems reasonable. After all, if they come across something compelling, they can put their own ideas on ice and go work on this startup that already has something going for it - i.e, someone's made a commitment and it is no longer languishing in the idea zone.
As an entrepreneur in hiring mode, I do run across these people every so often. In fact, many of them trot out their having an idea as proof of their entrepreneurial bent and startup interests. (A very few open, confident souls share their ideas with me - and in return get helped with advice and useful contacts. Those who don't make me briefly wonder if they're competing in some way, but I don't waste cycles on that.) Color me skeptical, but I'm just not convinced that this is a great way to go about validating an idea. My own ideas took time to develop, and I went about doing that by directly approaching people who I thought could give me useful feedback on the idea, on startups, markets, whatever, but I would never waste my time (or anyone else's) interviewing for a job when I had my own idea was itching for attention.
I've tried to understand this approach as obviously quite a few people use it. And realized it may go back to the passion thing. When you're not consumed by your idea, you're open to shopping around. You want to check out the field because you're not ready for commitment. It is possible the browsing helps a few people figure out that their idea is worth something after all. But there is a better, and more direct way. If you have your own idea, just work on figuring out if it's worth pursuing - many entrepreneurs will be happy to help. Don't kid yourself that you're really open to a job at another startup and you can do an interview - you're going to think that 'mine' trumps 'theirs' anyway. Human nature and all that.
Know when to hold
A couple of days ago I had a catch-up coffee with a VC friend of mine and he was filling me in on what was happening with his VC firm (one of those small, boutique funds) and their portfolio companies. I knew two of the companies and their founders quite well. One is still in play, with the support of the VC firm, and has become cash-flow positive, though they're yet to take off. The other, inspite of having decent revenue at some point, just couldn't prove a convincing future, and was shut down, another casualty of the dotcom bust.
But the more interesting stories were about the companies that the VCs had given up on, the ones they thought had no future, but the founder CEOs thought otherwise. They were basically given up for dead, but the entrepreneurs did not fold. Somehow they held on, revamped, restructured, did whatever they could to reel in customers and flourish.
This was the question my VC friend posed - how do you know which one would survive? How do you know when to hold? There is no formula for this. It's not just the financial projections, which can be just proof that the management knows which rows and columns show up on the spreadsheet. It's not just the product or the market, which probably need finessing since the company's survival is under doubt. I do believe it has a lot to do with the founder. As Paul Graham says in his Startup Lessons, it is more important to have a founder with determination than one who's super smart. And yes, there's a difference between determination and bull-headedness. Not having been on the other side of the table I don't know what the VC sees, but from my side, it is a very subjective call. If the entrepreneur has passion and commitment, it shows. You need the opposite of the poker face here: you need to see it in the gestures and hear it in the voice, not just go by the words. You need the body language that shows that this entrepreneur is going to make it work. That's how you know when to hold.
But the more interesting stories were about the companies that the VCs had given up on, the ones they thought had no future, but the founder CEOs thought otherwise. They were basically given up for dead, but the entrepreneurs did not fold. Somehow they held on, revamped, restructured, did whatever they could to reel in customers and flourish.
This was the question my VC friend posed - how do you know which one would survive? How do you know when to hold? There is no formula for this. It's not just the financial projections, which can be just proof that the management knows which rows and columns show up on the spreadsheet. It's not just the product or the market, which probably need finessing since the company's survival is under doubt. I do believe it has a lot to do with the founder. As Paul Graham says in his Startup Lessons, it is more important to have a founder with determination than one who's super smart. And yes, there's a difference between determination and bull-headedness. Not having been on the other side of the table I don't know what the VC sees, but from my side, it is a very subjective call. If the entrepreneur has passion and commitment, it shows. You need the opposite of the poker face here: you need to see it in the gestures and hear it in the voice, not just go by the words. You need the body language that shows that this entrepreneur is going to make it work. That's how you know when to hold.
Show and tell
I noticed something as I was interviewing a candidate last week - people can say they're excited about something, but maybe they're trying so hard to be cool they've turned frosty, because they don't seem convincing at all. I've interviewed more people than I care to remember, and have been interviewed myself a few times (though surprisingly, not that much), and one of the key components of any interview, whichever side of the table I may be on, is enthusiasm.
Granted, a candidate may not be excited about a company, its product, team, the position whatever. In that case, I'd expect an 'interesting', and a politely quick exit. If the candidate had minimal interviewing skills, s/he would send a thank-you-but-not-right-now email to close the loop, but leave no smoking bridges behind. But, I've come across candidates who profess great interest in some area - marketing, architecture, design - but can't seem to turn up the heat and get animated about it. I'm not looking for enthusiasm about my idea necessarily (though I hope that'll come), but I'm looking for the ability to get enthusiastic about something.
I try to not be judgemental, and make allowances for different personality types, so I don't expect everyone to be able to show their enthusiasm in their speech. I've trained myself to look for non-verbal cues too. One of the guys I interviewed for an architect position was not at all 'sales-y' by nature, but showed his enthusiasm by talking in depth about his projects, and his interest in the job by his quick email responses and phone calls. After his conversation with me he did a ton of research and emailed his findings and feedback. Ultimately we mutually decided that his skill set was not a good match, but he's a guy I'd recommend wholeheartedly - because he put his whole heart into the process.
As an entrepreneur I have no trouble showing my passion for my venture - actually, I have to make sure I dial it down a bit so the other person doesn't just reflect my enthusiasm back to me. And at least two out of three people I talk to are full of zest. I'm just surprised that so many don't show a spark when seeking a job in an early-stage startup in Silicon Valley where even big companies talk about passion. Startups thrive on energy, intellectual as well as emotional. If you want to join one, show that you have some - in your discussions, your emails, your followup. It'll help you move to the next level and another latte at the very least.
Granted, a candidate may not be excited about a company, its product, team, the position whatever. In that case, I'd expect an 'interesting', and a politely quick exit. If the candidate had minimal interviewing skills, s/he would send a thank-you-but-not-right-now email to close the loop, but leave no smoking bridges behind. But, I've come across candidates who profess great interest in some area - marketing, architecture, design - but can't seem to turn up the heat and get animated about it. I'm not looking for enthusiasm about my idea necessarily (though I hope that'll come), but I'm looking for the ability to get enthusiastic about something.
I try to not be judgemental, and make allowances for different personality types, so I don't expect everyone to be able to show their enthusiasm in their speech. I've trained myself to look for non-verbal cues too. One of the guys I interviewed for an architect position was not at all 'sales-y' by nature, but showed his enthusiasm by talking in depth about his projects, and his interest in the job by his quick email responses and phone calls. After his conversation with me he did a ton of research and emailed his findings and feedback. Ultimately we mutually decided that his skill set was not a good match, but he's a guy I'd recommend wholeheartedly - because he put his whole heart into the process.
As an entrepreneur I have no trouble showing my passion for my venture - actually, I have to make sure I dial it down a bit so the other person doesn't just reflect my enthusiasm back to me. And at least two out of three people I talk to are full of zest. I'm just surprised that so many don't show a spark when seeking a job in an early-stage startup in Silicon Valley where even big companies talk about passion. Startups thrive on energy, intellectual as well as emotional. If you want to join one, show that you have some - in your discussions, your emails, your followup. It'll help you move to the next level and another latte at the very least.
A different view
I read an article in The New York Times a few days ago, titled 'In the Web World, Rich Now Envy the Superrich' - the title is pretty self-explanatory. Those who make a few millions are chagrined by those who make significantly more (the $1.65 Billion YouTube deal is mentioned of course). The spin is that it's all good, it sparks the competitive spirit and keeps Silicon Valley going for the gold.
All potentially true. And yet. I find it ironic that the article mentioned this entrepreneur who'd made a bundle trading down from a Porsche Boxster to a Prius to sidestep the challenge of keeping up with the golden boys' 911's and Ferraris - and I just got a Prius myself, but that was mostly to dump the eco-guilt of driving an otherwise excellent SUV. I shared this article with a bunch of friends in startups and while a few thought it was a sign of new and exciting times, a few others groaned, ruefully admitting to the growing startup envy where size matters - hugely. I know of so many companies that have excellent products and great traction but would never get within shouting distance of a YouTube like deal. I think of how so many people greet news of my own fledgling venture with the question 'could it be as big as YouTube?' (short answer: never). And most of all, I think of the subject of my previous post, BUILD, which struggles to raise money to keep reaching out to the young, under-privileged and under-resourced entrepreneurs out there.
A different perspective and a whole different reality.
All potentially true. And yet. I find it ironic that the article mentioned this entrepreneur who'd made a bundle trading down from a Porsche Boxster to a Prius to sidestep the challenge of keeping up with the golden boys' 911's and Ferraris - and I just got a Prius myself, but that was mostly to dump the eco-guilt of driving an otherwise excellent SUV. I shared this article with a bunch of friends in startups and while a few thought it was a sign of new and exciting times, a few others groaned, ruefully admitting to the growing startup envy where size matters - hugely. I know of so many companies that have excellent products and great traction but would never get within shouting distance of a YouTube like deal. I think of how so many people greet news of my own fledgling venture with the question 'could it be as big as YouTube?' (short answer: never). And most of all, I think of the subject of my previous post, BUILD, which struggles to raise money to keep reaching out to the young, under-privileged and under-resourced entrepreneurs out there.
A different perspective and a whole different reality.
An entrepreneur who's building hope
Suzanne McKechnie Klahr is a archetypal entrepreneur. She's extremely passionate about her venture, and can bring the most cynical skeptic to buy into her pitch. She works incredibly hard and has set aside big bucks and a safe career for the life of a founder/CEO building her venture from scratch. But she's not building software or an appliance or 'shareholder value'. She's helping kids from the less privileged neighborhoods stay in school, keep up their grades, graduate and make it to college - often the first in their extended families to do so. And she's doing it in a quintessentially Silicon Valley way - making them into entrepreneurs.
Just about the time when the dotcom boom was at its height, Suzanne, in true startup style, kicked off BUILD with four students, in loaner digs, just on the other side of the highway (and a world apart) from Sandhill road and the offices of VCs and the upwardly mobile high tech ventures. Today she's expanded into her second site and looking to replicate the model in other parts of the country. BUILD's goal is very simple - take the kids who have potential but not the family or social backing to stay in school, and help them not only complete high school, but reach for a college degree and get it. To do this, BUILD has a very 'enterprising' hook: entrepreneurship. Most teenagers love to make money, and it is even more empowering if it's from a business that they own and run themselves. BUILD gives them the training they need with business plans, marketing tactics etc., and along the way they become math savvy, PowerPoint proficient and comfortable with public speaking, among other things. The students get the kind of training most first time entrepreneurs would kill for - and to cap it off, they pitch to a bunch of judges (usually local business leaders) and winning entries get seed money, just like any old startup.
Last week Suzanne was one of the inductees of the Ashoka fellowship for social entrepreneurs, another in a series of accolades. It is wonderful that she's getting recognition for what she has done. She needs all the publicity and support she can get as being a CEO of a non-profit is not easy. Non-profits are always seeking funding and there are no dreams of IPOs or hefty acquisitions. Suzanne's out there doing her pitch to everyone she can, being the best possible salesperson, chasing every lead in order to bring in money. The good news is that Suzanne's not into this all by herself, she's built a great team of smart, dedicated people and there are an amazing number of mentors (from VC firms, high tech firms etc.) who give up time every week to coach these teens as they work on their businesses.
BUILD is one of my favorite non-profits as it is all about entrepreneurship. It is about an entrepreneur who's helping shape new entrepreneurs and giving them skills and hope. It's about using the Silicon Valley model to do good. Check it out. Suzanne's story and BUILD may spark something in you.
Just about the time when the dotcom boom was at its height, Suzanne, in true startup style, kicked off BUILD with four students, in loaner digs, just on the other side of the highway (and a world apart) from Sandhill road and the offices of VCs and the upwardly mobile high tech ventures. Today she's expanded into her second site and looking to replicate the model in other parts of the country. BUILD's goal is very simple - take the kids who have potential but not the family or social backing to stay in school, and help them not only complete high school, but reach for a college degree and get it. To do this, BUILD has a very 'enterprising' hook: entrepreneurship. Most teenagers love to make money, and it is even more empowering if it's from a business that they own and run themselves. BUILD gives them the training they need with business plans, marketing tactics etc., and along the way they become math savvy, PowerPoint proficient and comfortable with public speaking, among other things. The students get the kind of training most first time entrepreneurs would kill for - and to cap it off, they pitch to a bunch of judges (usually local business leaders) and winning entries get seed money, just like any old startup.
Last week Suzanne was one of the inductees of the Ashoka fellowship for social entrepreneurs, another in a series of accolades. It is wonderful that she's getting recognition for what she has done. She needs all the publicity and support she can get as being a CEO of a non-profit is not easy. Non-profits are always seeking funding and there are no dreams of IPOs or hefty acquisitions. Suzanne's out there doing her pitch to everyone she can, being the best possible salesperson, chasing every lead in order to bring in money. The good news is that Suzanne's not into this all by herself, she's built a great team of smart, dedicated people and there are an amazing number of mentors (from VC firms, high tech firms etc.) who give up time every week to coach these teens as they work on their businesses.
BUILD is one of my favorite non-profits as it is all about entrepreneurship. It is about an entrepreneur who's helping shape new entrepreneurs and giving them skills and hope. It's about using the Silicon Valley model to do good. Check it out. Suzanne's story and BUILD may spark something in you.
What do you do with an idea
On my way back from Dallas, enjoying the fantasy luxuries of a back-of-the-bus seat, I got into a conversation with an electrical engineering professor from an East Coast university who was attending an IEEE conference in Silicon Valley. We went through the usual 'what do you do?' bit (though on a flight you can cleverly introduce it as 'are you traveling on business or pleasure?') and when he heard about my entrepreneurial bent, he asked 'So you have an idea, what do you do with it? How do you start a company?'.
I was a little surprised - nobody's ever asked me that before. Maybe it's because most of the people I meet who talk about starting companies already know a lot about this. Maybe it's because most of them are from the Silicon Valley and know that angels are not mythical and VC is nothing like AC or DC. So I actually had to think before I answered.
The first thing to do, I said, is to make sure your idea is viable. It has to be something that you can build a profitable business on, something the market needs and wants. So go figure out if that's the case. And if you're an engineer with little or no business experience, find someone who'll help you in doing just that - and build a small piece of your proposed offering to show your potential customers. If the idea looks like it could fly, then go get familiar with business plans, funding strategies etc. There are zillions of books, sites, workshops, seminars, not to mention helpful mentors, who can get you oriented and equipped in navigating the world of the startup.
I filled him in on the cycle from seed to success - and maybe planted an entrepreneurial seed too. I'm really glad I was asked this question though, apart from the passing of time in a cramped delayed flight. Right now I am juggling a lot of things, and it helped to remind myself of how I got here with my idea and what is most important. Fill a need. Prove it.
I was a little surprised - nobody's ever asked me that before. Maybe it's because most of the people I meet who talk about starting companies already know a lot about this. Maybe it's because most of them are from the Silicon Valley and know that angels are not mythical and VC is nothing like AC or DC. So I actually had to think before I answered.
The first thing to do, I said, is to make sure your idea is viable. It has to be something that you can build a profitable business on, something the market needs and wants. So go figure out if that's the case. And if you're an engineer with little or no business experience, find someone who'll help you in doing just that - and build a small piece of your proposed offering to show your potential customers. If the idea looks like it could fly, then go get familiar with business plans, funding strategies etc. There are zillions of books, sites, workshops, seminars, not to mention helpful mentors, who can get you oriented and equipped in navigating the world of the startup.
I filled him in on the cycle from seed to success - and maybe planted an entrepreneurial seed too. I'm really glad I was asked this question though, apart from the passing of time in a cramped delayed flight. Right now I am juggling a lot of things, and it helped to remind myself of how I got here with my idea and what is most important. Fill a need. Prove it.
What type is your org?
Maybe it'll never reach the dubious popularity of "what's your sign?" as an ice-breaker, but it is not inconceivable that in certain circles checking out your organization's type may be the conversational gambit du jour - thanks to a new book 'The Starfish and the Spider' by Ori Brafman and Rod A. Beckstrom. I read it a few weeks ago (got an early copy at one of the events I attended - nice bennie!) and found it not only a fast and interesting read, but fun to talk about.
Very briefly it's about centralized (spider) and de-centralized (starfish) organizations, with a strong bias towards the ocean-dweller. It covers the Apaches as well as Apache, and makes a case for why the starfish model is hard to stop. Coincidentally, the recent issue of Scientific American (Nov 2006, and I only wish I read the mag regularly) had a forum piece (by Stuart Kauffman) on how biology may deliver insights into adaptable economic systems that physics cannot - and a point about how too much 'central control' could limit the adaptability. There's a common thread between these two: non-hierarchical, de-centralized, loosely structured organizations are more nimble and successful.
It made me think about early stage startup teams. The best ones are flexible and fast, and are usually too small to have much of a hierarchy. They don't quite follow the 'de-centralized' model as they're often just a few people in the group with the center and edges all blurring into one, but they do have 'catalysts' and 'champions' as mentioned in the book. These are the passionate people who make the startup work - and yes, here we go again, passion's in play. The starfish organization builds up around an idea, cause or even technology, with a goal to spread it to a large number of people, possibly changing behavior. Getting people to buy into your vision and make change happen is not done by decree, but by dialog and dedication, calling for catalysts and champions - and guess what, entrepreneurs fit the bill too.
Very briefly it's about centralized (spider) and de-centralized (starfish) organizations, with a strong bias towards the ocean-dweller. It covers the Apaches as well as Apache, and makes a case for why the starfish model is hard to stop. Coincidentally, the recent issue of Scientific American (Nov 2006, and I only wish I read the mag regularly) had a forum piece (by Stuart Kauffman) on how biology may deliver insights into adaptable economic systems that physics cannot - and a point about how too much 'central control' could limit the adaptability. There's a common thread between these two: non-hierarchical, de-centralized, loosely structured organizations are more nimble and successful.
It made me think about early stage startup teams. The best ones are flexible and fast, and are usually too small to have much of a hierarchy. They don't quite follow the 'de-centralized' model as they're often just a few people in the group with the center and edges all blurring into one, but they do have 'catalysts' and 'champions' as mentioned in the book. These are the passionate people who make the startup work - and yes, here we go again, passion's in play. The starfish organization builds up around an idea, cause or even technology, with a goal to spread it to a large number of people, possibly changing behavior. Getting people to buy into your vision and make change happen is not done by decree, but by dialog and dedication, calling for catalysts and champions - and guess what, entrepreneurs fit the bill too.
Keeping it legal
Last week, I attended a one-day conference at TiE Silicon Valley titled 'From Garage to IPO: How to build a successful Internet Company'. (Ironically most of the companies featured in the panels were acquired and didn't go public.) There were many interesting insights, everything from how not to name your company to when you can't build your business plan on ad revenue.
But there were two items that stood out for me: one was the number of people who mentioned the passion and dedication of the startup teams. Not just founders/entrepreneurs, but investors and M&A scouts who look for those qualities too before they get cozy with startups. And of course, it came up as a requirement for being able to handle the ups and downs (well, the downs) of startups. Caterina Fake, entrepreneurial celeb, co-founder of Flickr, spoke soberly about the tough times that the team had to ride out. Making payroll was a big issue, even if they didn't have huge salaries, as they didn't take in much money, but the small team stuck it out as they couldn't dream of doing anything different. The reaction of the audience was interesting as it seemed to bring both the slight chill of reality as well as the warmth of a shared experience - there were some wide eyes as well as nodding heads.
The other noteworthy item was the number of times lawyers showed up on the panels. It used to be that panels had entrepreneurs and VCs, and lawyers got involved only when the topics were contracts, intellectual property and the like. But now lawyers are weighing in on a lot more subjects. I think it's a sign of the times. With so many companies in the news because of the their legal troubles, and so many more opportunities to get into legal hot water with copyrights etc., it seems that the entrepreneur has to get chummy with lawyers a lot earlier in the game and for a lot more than just incorporation and stock issuance. It appears that this one area, legal advice for emerging companies, especially technology companies, is not going to be outsourced/offshored any time soon. Sure, the routine stuff may be more affordably handled elsewhere, but there are small swarms of entrepreneurs sitting at mahogony tables being educated on the nuances of rights and ownership and employment laws. Keeping it legal may not be as much fun as designing the product or evangelizing to customers, but it's necessary so you can have some confidence that the rug won't be yanked out from under your feet just when you're getting the moves down.
But there were two items that stood out for me: one was the number of people who mentioned the passion and dedication of the startup teams. Not just founders/entrepreneurs, but investors and M&A scouts who look for those qualities too before they get cozy with startups. And of course, it came up as a requirement for being able to handle the ups and downs (well, the downs) of startups. Caterina Fake, entrepreneurial celeb, co-founder of Flickr, spoke soberly about the tough times that the team had to ride out. Making payroll was a big issue, even if they didn't have huge salaries, as they didn't take in much money, but the small team stuck it out as they couldn't dream of doing anything different. The reaction of the audience was interesting as it seemed to bring both the slight chill of reality as well as the warmth of a shared experience - there were some wide eyes as well as nodding heads.
The other noteworthy item was the number of times lawyers showed up on the panels. It used to be that panels had entrepreneurs and VCs, and lawyers got involved only when the topics were contracts, intellectual property and the like. But now lawyers are weighing in on a lot more subjects. I think it's a sign of the times. With so many companies in the news because of the their legal troubles, and so many more opportunities to get into legal hot water with copyrights etc., it seems that the entrepreneur has to get chummy with lawyers a lot earlier in the game and for a lot more than just incorporation and stock issuance. It appears that this one area, legal advice for emerging companies, especially technology companies, is not going to be outsourced/offshored any time soon. Sure, the routine stuff may be more affordably handled elsewhere, but there are small swarms of entrepreneurs sitting at mahogony tables being educated on the nuances of rights and ownership and employment laws. Keeping it legal may not be as much fun as designing the product or evangelizing to customers, but it's necessary so you can have some confidence that the rug won't be yanked out from under your feet just when you're getting the moves down.
Can it be taught?
Over the last few weeks I've had a couple of conversations with a bunch of young people from NUSEA, an organization that brings entrepreneurially minded young Singaporeans to the Silicon Valley so they can absorb and learn from the Silicon Valley culture. They're are very energetic, curious and eager to learn as much as they can in their year in the Valley.
When I mentioned this to a friend of mine, he wondered if entrepreurship can really be taught. Of course, there's tons of money being made in entrepreneurship classes, but most of them cover a lot of the how-to's which are definitely teachable. But what makes one an entrepreneur is not knowing how to start a company, but the innate drive to do so. This is a favorite topic of mine covered in many previous posts, specifically Definition of an Entrepreneur, and Are you an Entrepreneur. Fundamental to being an entrepreneur is a willingness to take the risk to go after an opportunity. And following through with it. To me, this seems to be more a trait than a skill that can be taught through books and classroom exercises.
But it is an attitude that can be developed. Take the young people from Singapore. They come to Silicon Valley because they've already been bitten by the entrepreneurial bug (couldn't be a travel bug as they have to work too hard while they're here). The spark's in place, and a stint in the Valley could very well fan it into a good-sized flame. They're doing all the right things to fully immerse themselves in the culture - taking on internships, attending lectures, workshops, seminars, and initiating conversations with local entrepreneurs etc. And they go after it with gusto and passion. Though everyone assumes that passion in youth is to be expected, frequently passion for any one thing in youth lasts about as long as a new tune on the top 10. It is impressive to see the young people in NUSEA who've sustained their passion for entrepreneurship for an extended length of time - looks they're on to the real thing. And they're not 'learning' to be entrepreneurs. They are growing and strengthening their entrepreneurial spirit. Entrepreneurs may not be 'made', but they sure can be cultivated. It would be fun to see what this crop produces.
When I mentioned this to a friend of mine, he wondered if entrepreurship can really be taught. Of course, there's tons of money being made in entrepreneurship classes, but most of them cover a lot of the how-to's which are definitely teachable. But what makes one an entrepreneur is not knowing how to start a company, but the innate drive to do so. This is a favorite topic of mine covered in many previous posts, specifically Definition of an Entrepreneur, and Are you an Entrepreneur. Fundamental to being an entrepreneur is a willingness to take the risk to go after an opportunity. And following through with it. To me, this seems to be more a trait than a skill that can be taught through books and classroom exercises.
But it is an attitude that can be developed. Take the young people from Singapore. They come to Silicon Valley because they've already been bitten by the entrepreneurial bug (couldn't be a travel bug as they have to work too hard while they're here). The spark's in place, and a stint in the Valley could very well fan it into a good-sized flame. They're doing all the right things to fully immerse themselves in the culture - taking on internships, attending lectures, workshops, seminars, and initiating conversations with local entrepreneurs etc. And they go after it with gusto and passion. Though everyone assumes that passion in youth is to be expected, frequently passion for any one thing in youth lasts about as long as a new tune on the top 10. It is impressive to see the young people in NUSEA who've sustained their passion for entrepreneurship for an extended length of time - looks they're on to the real thing. And they're not 'learning' to be entrepreneurs. They are growing and strengthening their entrepreneurial spirit. Entrepreneurs may not be 'made', but they sure can be cultivated. It would be fun to see what this crop produces.
The importance of being ethical
I was having a conversation about the HP brouhaha recently and there was some discussion of whether this was just a big company problem. The problem has many facets to it, questionable ethics being front and center, and that's what I'm focusing on, as the legality issues are just a corollary (in my opinion, if people had made ethical choices, there probably wouldn't have been legal entanglements).
So, would a startup ever run into a problem like this? Granted, startups usually can't afford the big-bucks snooping (never mind it was snooping on your own people) and 'pretext' would probably just be a fancy word for an excuse (or the precursor to an SMS). In my opinion, it is not the size or scope of the act, but its rightness (or wrongness), and it can happen in a startup as well as in a larger company.
A lot of companies, including early-stage startups with eager, idealistic entrepreneurs, have company 'values' and I bet everyone has 'integrity' in there or something that smells awfully close (even if it's like Google's famous 'Don't be evil'). And of course, one would expect that the leadership of the company (the ones who signed off on these values) would be hyper-aware of them and not ever get into a bind like the one at HP. Not to mention, HP has long been considered one of 'good guys', a company to emulate in its 'uprightness'.
So how do things fall apart? (I'm just speculating here, based on my own experiences with 'iffy' issues over many years. ) There are two major contributors to veering off the straight and narrow path. One, you lose sight of the big picture and focus on the single tree that is crowding your vision, instead of the forest. A small (in many ways) example: one of our competitors (another startup) used the exact same quote, and similar sounding text on their website as was on the home page of my last startup (and we were there a few months earlier). Our small team got very agitated and upset and were trying to figure out how to get back at them, or least make them cease and desist. It took a little while to get to the realization that just because they were unethical and didn't have class, it didn't mean we should be the same. We also figured out that the issue wasn't just this particular startup, we couldn't prevent every obscure startup out there from leveraging what we put out publicly on our site - the only way to do it was to be smart about what we said publicly (and yes, we were too small to initiate legal action). Ultimately we reminded ourselves of who we were and what we were about, and dealt with it appropriately.
Two, when you embark on something you've never done before, it needs more scrutiny. Business as usual has the advantage of already being vetted and blessed that it is kosher and fills legal, ethical and, of course, business requirements. When you veer off into new territory (it is safe to assume spying was not SOP for HP), you have to take extra efforts to make sure it won't come back to haunt you. And you have to do it thoroughly - not just from the legal and business perspectives, but the ethical one too. I'm in the middle of negotiating with a couple of different people on doing some IP-related work, and it is taking an awful lot of effort to make sure both our rights are protected. A template covers the legalities, but it is not so easy to get to a point where both parties feel it is equitable, especially when I have to anticipate what could potentially happen in the future. As far as I'm concerned, I'm aiming not only for a positive business outcome, but to believe it when I say it's a fair deal.
But, being ethical is easier said than done. Situations are not clear cut, especially when you're working on retaining your competitive advantage, profitability etc. It's all one gray blur like an MC Escher painting spinning by. So how do you figure out if an action is ethical or not? One trick is to use the gold standard of 'would you like it if someone did this to you'? It's always worked for me. (I'd hate if if someone spied on my calls, however boring and innocuous they may be, so rest assured I won't go there.) Simplistic, but easy to remember. And that, ultimately is the most important thing - you have to remember to be ethical.
So, would a startup ever run into a problem like this? Granted, startups usually can't afford the big-bucks snooping (never mind it was snooping on your own people) and 'pretext' would probably just be a fancy word for an excuse (or the precursor to an SMS). In my opinion, it is not the size or scope of the act, but its rightness (or wrongness), and it can happen in a startup as well as in a larger company.
A lot of companies, including early-stage startups with eager, idealistic entrepreneurs, have company 'values' and I bet everyone has 'integrity' in there or something that smells awfully close (even if it's like Google's famous 'Don't be evil'). And of course, one would expect that the leadership of the company (the ones who signed off on these values) would be hyper-aware of them and not ever get into a bind like the one at HP. Not to mention, HP has long been considered one of 'good guys', a company to emulate in its 'uprightness'.
So how do things fall apart? (I'm just speculating here, based on my own experiences with 'iffy' issues over many years. ) There are two major contributors to veering off the straight and narrow path. One, you lose sight of the big picture and focus on the single tree that is crowding your vision, instead of the forest. A small (in many ways) example: one of our competitors (another startup) used the exact same quote, and similar sounding text on their website as was on the home page of my last startup (and we were there a few months earlier). Our small team got very agitated and upset and were trying to figure out how to get back at them, or least make them cease and desist. It took a little while to get to the realization that just because they were unethical and didn't have class, it didn't mean we should be the same. We also figured out that the issue wasn't just this particular startup, we couldn't prevent every obscure startup out there from leveraging what we put out publicly on our site - the only way to do it was to be smart about what we said publicly (and yes, we were too small to initiate legal action). Ultimately we reminded ourselves of who we were and what we were about, and dealt with it appropriately.
Two, when you embark on something you've never done before, it needs more scrutiny. Business as usual has the advantage of already being vetted and blessed that it is kosher and fills legal, ethical and, of course, business requirements. When you veer off into new territory (it is safe to assume spying was not SOP for HP), you have to take extra efforts to make sure it won't come back to haunt you. And you have to do it thoroughly - not just from the legal and business perspectives, but the ethical one too. I'm in the middle of negotiating with a couple of different people on doing some IP-related work, and it is taking an awful lot of effort to make sure both our rights are protected. A template covers the legalities, but it is not so easy to get to a point where both parties feel it is equitable, especially when I have to anticipate what could potentially happen in the future. As far as I'm concerned, I'm aiming not only for a positive business outcome, but to believe it when I say it's a fair deal.
But, being ethical is easier said than done. Situations are not clear cut, especially when you're working on retaining your competitive advantage, profitability etc. It's all one gray blur like an MC Escher painting spinning by. So how do you figure out if an action is ethical or not? One trick is to use the gold standard of 'would you like it if someone did this to you'? It's always worked for me. (I'd hate if if someone spied on my calls, however boring and innocuous they may be, so rest assured I won't go there.) Simplistic, but easy to remember. And that, ultimately is the most important thing - you have to remember to be ethical.
Create. Connect. Care.
Or, why I do what I do.
Every now and then I run into someone who wants to know how I made the choice to go after the 'startup with a social impact' gig that I'm now on. After all, someone like me is not a fresh young grad just starting a career, but is usually 'leveraging' many years of experience and skills into the next level of one. With my background as an IT exec and an entrepreneur in enterprise software, 'enterprise' should have loomed large in any future plans.
And it did. While checking out options of joining larger companies or startups, I was (and still am) providing strategic IT consulting. I've always had a yen to have my work be more socially relevant (instead of just doing it on my spare time), but I thought that's what I'd do after a few more years of padding the financial cushion. But something didn't feel right and the whole cushion approach was getting uncomfortable (kind of like the old fable about the princess still feeling the pea under her many fluffy mattresses?). When I was talking to a career counselor friend, she mentioned that the discomfort was probably due to me making a choice based on what's expedient instead of what's important to me. It was a good point, I had just gone along with what everyone expected would be the next thing for me.
So, I took some time to step back and get to know myself better. Didn't need a retreat in the mountains or on the beach (though coming to think of it, I should have taken the chance), just a couple of hours of quiet, a couch, and my laptop to write my thoughts. This time around I thought about not only what I enjoyed about work, but also what kinds of things give me a kick outside of it, and voila! I noticed a pattern. There are things that give pleasure, things that give joy, and then the things I find most fulfilling. Fulfillment for me came from things that have three common elements. Create. Connect. Care.
Creating something myself, or experiencing what someone else has created, is exhilarating to me. Creative solutions to problems are a big kick, and so is watching a play. Connecting. I truly enjoy connecting the dots (i.e., understanding patterns and links) as well as connecting with people (and understanding what makes them tick), and even connecting people to each other - fun for me almost always involves some connecting. Caring. This is at many levels. It's not only caring about the big stuff like the climate, or the future of education or elder care, but caring about the individuals and outcomes (on occasion, a little too much). And, most of all, caring is being engaged and involved, not just phoning it in. I'm not good at working just for a paycheck - I can't hold myself back from getting involved, which could be problematic in some situations.
So, this self-awareness got me deciding to not wait for a few years, but to go out and find something now that will help me create, connect and care. And I'm happy to say I did. A chance to create a solution, connect with great people to build a team, and build a company that cares to both help people and make money - create, connect, care at so many levels. And, I get to leverage a lot of what I've already learned.
I made a new friend recently. A smart, successful, aware woman who'd heard me speak at a panel on how individuals can help the education cause and wanted to know more, particularly as she's currently considering bringing more meaning to her career. She asked me about what's driving me and I shared my 'create, connect, care' mantra with her. She very sweetly asked if she could 'borrow' it - and I was amused. I don't own this. No trademarks, copyrights, or any other instrument of ownership. This is not a grand mission statement, or some lofty positioning, and there are no claims to greatness. Just what's driving my choices, with a nice and fortuitous bit of alliteration. Create. Connect. Care.
Every now and then I run into someone who wants to know how I made the choice to go after the 'startup with a social impact' gig that I'm now on. After all, someone like me is not a fresh young grad just starting a career, but is usually 'leveraging' many years of experience and skills into the next level of one. With my background as an IT exec and an entrepreneur in enterprise software, 'enterprise' should have loomed large in any future plans.
And it did. While checking out options of joining larger companies or startups, I was (and still am) providing strategic IT consulting. I've always had a yen to have my work be more socially relevant (instead of just doing it on my spare time), but I thought that's what I'd do after a few more years of padding the financial cushion. But something didn't feel right and the whole cushion approach was getting uncomfortable (kind of like the old fable about the princess still feeling the pea under her many fluffy mattresses?). When I was talking to a career counselor friend, she mentioned that the discomfort was probably due to me making a choice based on what's expedient instead of what's important to me. It was a good point, I had just gone along with what everyone expected would be the next thing for me.
So, I took some time to step back and get to know myself better. Didn't need a retreat in the mountains or on the beach (though coming to think of it, I should have taken the chance), just a couple of hours of quiet, a couch, and my laptop to write my thoughts. This time around I thought about not only what I enjoyed about work, but also what kinds of things give me a kick outside of it, and voila! I noticed a pattern. There are things that give pleasure, things that give joy, and then the things I find most fulfilling. Fulfillment for me came from things that have three common elements. Create. Connect. Care.
Creating something myself, or experiencing what someone else has created, is exhilarating to me. Creative solutions to problems are a big kick, and so is watching a play. Connecting. I truly enjoy connecting the dots (i.e., understanding patterns and links) as well as connecting with people (and understanding what makes them tick), and even connecting people to each other - fun for me almost always involves some connecting. Caring. This is at many levels. It's not only caring about the big stuff like the climate, or the future of education or elder care, but caring about the individuals and outcomes (on occasion, a little too much). And, most of all, caring is being engaged and involved, not just phoning it in. I'm not good at working just for a paycheck - I can't hold myself back from getting involved, which could be problematic in some situations.
So, this self-awareness got me deciding to not wait for a few years, but to go out and find something now that will help me create, connect and care. And I'm happy to say I did. A chance to create a solution, connect with great people to build a team, and build a company that cares to both help people and make money - create, connect, care at so many levels. And, I get to leverage a lot of what I've already learned.
I made a new friend recently. A smart, successful, aware woman who'd heard me speak at a panel on how individuals can help the education cause and wanted to know more, particularly as she's currently considering bringing more meaning to her career. She asked me about what's driving me and I shared my 'create, connect, care' mantra with her. She very sweetly asked if she could 'borrow' it - and I was amused. I don't own this. No trademarks, copyrights, or any other instrument of ownership. This is not a grand mission statement, or some lofty positioning, and there are no claims to greatness. Just what's driving my choices, with a nice and fortuitous bit of alliteration. Create. Connect. Care.
Which comes first?
I recently met with an entrepreneur at a networking event (yes, I seem to do that a lot). He is an intense engineer who immediately started talking to me about his idea. Without going into too much detail, he's considering a programmable consumer device addressing a variety of possible uses.
Variety. Therein lies the entrepreneur's problem. He didn't know which particular consumer need he should fill, especially since he personally had about a dozen ideas on how the product could be used.
So I jumped in with what I thought to be winning advice. Go to a bunch of potential customers and - here's a novel idea - ask them what is their most important problem (in that particular space of course). Especially since his product was aimed at Joe Ordinary and his family, I thought the entrepreneur could do the checking among his own friends and family without much effort. Heck, I said, ask the would-be customers what would be their top three problems and you'd have a head start on your product roadmap.
Suffice to say, I was surprised that the suggestion met with the tepid reception of an hour-old latte. The entrepreneur was confident that he knew what the customer wanted, he just needed to figure out what he could built first and the rest would follow. And, he felt, it was too early to talk to the customers.
Hmmm. I can see why entrepreneurs, especially engineers, want to start building without spending too much time on 'focus groups' and 'market research'. You could be mired in the dreaded analysis paralysis or spend way too much money (if you have it) on fancy research techniques. And it is so much fun to build! But, on the other hand, you've got to know why anyone would want your product - not just why you'd want your product (see Customer Focus about tripping up on that particular path). And if you're aiming for the consumer market, you really have to know how your customer/user is likely to use your product.
Though I personally get attracted by a product idea, I'm learning to focus on understanding the customer first. I'm on my way to making it a fanatical focus even, because I've learned that without customers the product is nothing but a 'project'. And there's no substitute to spending a lot of time talking to, and observing, your potential users. I'm of the school of thought that believes engineers, architects, designers have to spend time in direct contact with their customers, not just let 'product marketing' tell them what to build. And this is all the more important in the early stages when your product is nothing more than mockups and PowerPoint slides about the mockups.
Prototypes are awesome, and often, necessary. But to build the prototype you first have to talk to your customers and figure out what you should put into it. And then, once you have your proto-widget, you have to go back to the customers (including the same ones you talked to earlier) and see what they have to say now. Most likely, you'll take your fine little proto back to your garage or the server in your bedroom and do it all over again. But the key point is, you can't build without talking to the customer. This is what should be emblazoned on every entrepreneur's garage, bathroom mirror, bedroom wall and screen saver: the customer comes first, not the product.
Variety. Therein lies the entrepreneur's problem. He didn't know which particular consumer need he should fill, especially since he personally had about a dozen ideas on how the product could be used.
So I jumped in with what I thought to be winning advice. Go to a bunch of potential customers and - here's a novel idea - ask them what is their most important problem (in that particular space of course). Especially since his product was aimed at Joe Ordinary and his family, I thought the entrepreneur could do the checking among his own friends and family without much effort. Heck, I said, ask the would-be customers what would be their top three problems and you'd have a head start on your product roadmap.
Suffice to say, I was surprised that the suggestion met with the tepid reception of an hour-old latte. The entrepreneur was confident that he knew what the customer wanted, he just needed to figure out what he could built first and the rest would follow. And, he felt, it was too early to talk to the customers.
Hmmm. I can see why entrepreneurs, especially engineers, want to start building without spending too much time on 'focus groups' and 'market research'. You could be mired in the dreaded analysis paralysis or spend way too much money (if you have it) on fancy research techniques. And it is so much fun to build! But, on the other hand, you've got to know why anyone would want your product - not just why you'd want your product (see Customer Focus about tripping up on that particular path). And if you're aiming for the consumer market, you really have to know how your customer/user is likely to use your product.
Though I personally get attracted by a product idea, I'm learning to focus on understanding the customer first. I'm on my way to making it a fanatical focus even, because I've learned that without customers the product is nothing but a 'project'. And there's no substitute to spending a lot of time talking to, and observing, your potential users. I'm of the school of thought that believes engineers, architects, designers have to spend time in direct contact with their customers, not just let 'product marketing' tell them what to build. And this is all the more important in the early stages when your product is nothing more than mockups and PowerPoint slides about the mockups.
Prototypes are awesome, and often, necessary. But to build the prototype you first have to talk to your customers and figure out what you should put into it. And then, once you have your proto-widget, you have to go back to the customers (including the same ones you talked to earlier) and see what they have to say now. Most likely, you'll take your fine little proto back to your garage or the server in your bedroom and do it all over again. But the key point is, you can't build without talking to the customer. This is what should be emblazoned on every entrepreneur's garage, bathroom mirror, bedroom wall and screen saver: the customer comes first, not the product.
The Social Scene
No, sorry, this is not about the symphony opening night or the partying of the rich and famous, just some musings on 'social' entrepreneurship prompted by some recent happenings.
Yesterday I attended a SiliconForum event on MicroFinancing. It was a topic that many of the 80 or so people - entrepreneurs, investors and entrepreneurs who're now investors - got engaged in, though many were not directly involved with MFI. This is an awesome way to help people help themselves and it is very encouraging that is trend is growing rapidly, though it is still a long ways from satisfying demand.
We had a follow-up discussion at our table that covered many issues, but what struck home was a thread on entrepreneurs. We have to remember that all the people who get tiny $50~ loans to buy a cow, or a pump or a sewing machine, are essentially entrepreneurs seeking 'funding' to get the resources to build a business. They have to face risks, sign up for hard work, and polish their sales skills just like any other entrepreneur, but with 'hunger' being a literal, not metaphorical, experience. Which brought up the point that, like all other entrepreneurs, they could really use mentors and the shortage of mentors is one of the bigger challenges to scaling the program.
Microfinancing itself is a blazing beacon of social entrepreneurship, started about 30 years ago by a young economist, Dr. Mohammend Yunus, using the money in his pocket to launch micro-loans to the poorest of the poor in Bangladesh who otherwise couldn't get out of their cycle of poverty, and today Grameen Bank is the grand-daddy of the many MFIs out there. Dr. Yunus also has his own views of 'social entrepreneurship' and how it can really change the world, definitely worth a read.
It is not far-fetched to say that entrepreneurship is what drives progress, and the social kind is what will save the human race.
Yesterday I attended a SiliconForum event on MicroFinancing. It was a topic that many of the 80 or so people - entrepreneurs, investors and entrepreneurs who're now investors - got engaged in, though many were not directly involved with MFI. This is an awesome way to help people help themselves and it is very encouraging that is trend is growing rapidly, though it is still a long ways from satisfying demand.
We had a follow-up discussion at our table that covered many issues, but what struck home was a thread on entrepreneurs. We have to remember that all the people who get tiny $50~ loans to buy a cow, or a pump or a sewing machine, are essentially entrepreneurs seeking 'funding' to get the resources to build a business. They have to face risks, sign up for hard work, and polish their sales skills just like any other entrepreneur, but with 'hunger' being a literal, not metaphorical, experience. Which brought up the point that, like all other entrepreneurs, they could really use mentors and the shortage of mentors is one of the bigger challenges to scaling the program.
Microfinancing itself is a blazing beacon of social entrepreneurship, started about 30 years ago by a young economist, Dr. Mohammend Yunus, using the money in his pocket to launch micro-loans to the poorest of the poor in Bangladesh who otherwise couldn't get out of their cycle of poverty, and today Grameen Bank is the grand-daddy of the many MFIs out there. Dr. Yunus also has his own views of 'social entrepreneurship' and how it can really change the world, definitely worth a read.
It is not far-fetched to say that entrepreneurship is what drives progress, and the social kind is what will save the human race.
Customer Focus
The Facebook fracas of last week is a cautionary tale on customer relations. On the surface, Facebook is successful with a loyal user base, with many millions of users, primarily students, preferring its network to other options. And, it had the ostensibly unbeatable benefit of a founder CEO who is a user too - he built something that he knew he and his friends could use when in college.
A sketchy recap on the issue. On the face of it (sorry!), it seems likely and logical that a user would want to know about updates to profiles of friends on his network automatically without having to seek them, and that the said friends wouldn't mind. But vast numbers of users got agitated, they didn't like their updates triggering auto feeds and felt it was a violation of privacy, much to Facebook's surprise. Techcrunch had a post supporting the usefulness of the new feature, noting all that people had to do if they didn't want the updates distributed was to set the privacy controls appropriately. That didn't soften the user response. The CEO, Mark Zuckerberg, put out a plea for calm, the users' concerns were being heard, but that didn't lessen the noise - nothing made a difference until the message went out that privacy controls will be enhanced and the feature tweaked to let the user determine what should be shared or not. Facebook received many kudos for having listened to the users, and being a role model for startups.
It is not surprising that Facebook listened to its users - in this kind of business, there is no alternative (though that could arguably be true for all businesses). The cautionary part is how easy it is to think you know your customer/user and be totally wrong. This is particularly true when you think you know how a user will react because hey, you're one yourself. The reality is that you (and your design staff) are not typical users. You are informed (ok, tainted) by the business you're building and the roles you're playing in building it, and will not have the same perspective or experiences of 'real' users. And somehow 'logical' assumptions on user behavior seem singularly fragile.
In the early stages of a startup, extrapolating user behavior is standard ops as there's not enough bandwidth to run every feature by a focus group. Making assumptions is unavoidable, but they must be acted upon with caution. Internal tests are good for bug testing, not for gauging customer response. Embrace the beta release instead and actively solicit feedback. And if something slips past your vigilance and kindles user outrage, don't try to explain your position - publish a fast mea culpa and retreat. You are not the customer, and the customer is always right.
A sketchy recap on the issue. On the face of it (sorry!), it seems likely and logical that a user would want to know about updates to profiles of friends on his network automatically without having to seek them, and that the said friends wouldn't mind. But vast numbers of users got agitated, they didn't like their updates triggering auto feeds and felt it was a violation of privacy, much to Facebook's surprise. Techcrunch had a post supporting the usefulness of the new feature, noting all that people had to do if they didn't want the updates distributed was to set the privacy controls appropriately. That didn't soften the user response. The CEO, Mark Zuckerberg, put out a plea for calm, the users' concerns were being heard, but that didn't lessen the noise - nothing made a difference until the message went out that privacy controls will be enhanced and the feature tweaked to let the user determine what should be shared or not. Facebook received many kudos for having listened to the users, and being a role model for startups.
It is not surprising that Facebook listened to its users - in this kind of business, there is no alternative (though that could arguably be true for all businesses). The cautionary part is how easy it is to think you know your customer/user and be totally wrong. This is particularly true when you think you know how a user will react because hey, you're one yourself. The reality is that you (and your design staff) are not typical users. You are informed (ok, tainted) by the business you're building and the roles you're playing in building it, and will not have the same perspective or experiences of 'real' users. And somehow 'logical' assumptions on user behavior seem singularly fragile.
In the early stages of a startup, extrapolating user behavior is standard ops as there's not enough bandwidth to run every feature by a focus group. Making assumptions is unavoidable, but they must be acted upon with caution. Internal tests are good for bug testing, not for gauging customer response. Embrace the beta release instead and actively solicit feedback. And if something slips past your vigilance and kindles user outrage, don't try to explain your position - publish a fast mea culpa and retreat. You are not the customer, and the customer is always right.
Dot-com 2.0?
Is it me who's confused or is the tech world partying like it is 1999 all over again? I am amazed at the number of startups calling themselves 'Web 2.0 companies' - and there's a term that needs to be squashed, ungently if need be, and quickly interred (not withstanding O'Reilly's definition). There's nothing inherently wrong with the term and what it was intended to define, and I initially found it very interesting and inspiring even (thinking of all the possibilities out there), but with so many startups jumping on the Web 2.0 bandwagon, it is getting hard to see the substance beyond the hype-storm.
The deja-vu is so thick and strong you could bottle and market it ('Redux', the perfume that will haunt you - again). It reminds me of the time when everyone was clambering onto the 'e-commerce' bandwagon, and then the 'marketplace' bandwagon, to be closely followed by 'b2b' and 'ASP', not to mention 'P2P' - I remember more than one person seriously advising me to pitch my venture as the hot-trend du jour. And here we go again - everyone want to start a Google, MySpace or YouTube even if they don't all have their business models figured out yet.
And yes, this rant does have something to do with the startup ethos. (By the way, this post has a tech-biz focus, but most likely faddism exists in other markets too - though they may not experience the same pandemic effects). I'm confident that the market will take care of itself sooner or later, and only the worthy will be standing and recognizable a couple of years down the road. But in the near term, the Web 2.0 frenzy seems to be bamboozling a whole bunch of new entrepreneurs and would-be members of the founding teams into thinking that's where they should be. It is sorely tempting to see if there's anyway to turn your idea into something resembling a community if you believe that's where the money is. And all the folks looking to join a startup believe that if the company doesn't have a Web 2.0 tag it is not worth their consideration.
It helps to remember the fundamentals. Instead of shlepping around a solution searching for a problem, start with a real, immediate need that is pervasive and (preferably) painful, something people will pay to get fixed and go figure out how to fix it for them. Alternately, take something people love to do (like connect with their friends or share baby pictures with family) and make it easier for them to do more of it in new and fun ways. Starting a company with 'can I make this look like MySpace?' seems like taking the entrepreneurial risk to a whole new level - one that most likely will end in a bust.
The deja-vu is so thick and strong you could bottle and market it ('Redux', the perfume that will haunt you - again). It reminds me of the time when everyone was clambering onto the 'e-commerce' bandwagon, and then the 'marketplace' bandwagon, to be closely followed by 'b2b' and 'ASP', not to mention 'P2P' - I remember more than one person seriously advising me to pitch my venture as the hot-trend du jour. And here we go again - everyone want to start a Google, MySpace or YouTube even if they don't all have their business models figured out yet.
And yes, this rant does have something to do with the startup ethos. (By the way, this post has a tech-biz focus, but most likely faddism exists in other markets too - though they may not experience the same pandemic effects). I'm confident that the market will take care of itself sooner or later, and only the worthy will be standing and recognizable a couple of years down the road. But in the near term, the Web 2.0 frenzy seems to be bamboozling a whole bunch of new entrepreneurs and would-be members of the founding teams into thinking that's where they should be. It is sorely tempting to see if there's anyway to turn your idea into something resembling a community if you believe that's where the money is. And all the folks looking to join a startup believe that if the company doesn't have a Web 2.0 tag it is not worth their consideration.
It helps to remember the fundamentals. Instead of shlepping around a solution searching for a problem, start with a real, immediate need that is pervasive and (preferably) painful, something people will pay to get fixed and go figure out how to fix it for them. Alternately, take something people love to do (like connect with their friends or share baby pictures with family) and make it easier for them to do more of it in new and fun ways. Starting a company with 'can I make this look like MySpace?' seems like taking the entrepreneurial risk to a whole new level - one that most likely will end in a bust.
Keeping it Fresh
Startups by their very nature are expected to be innovating, bleeding all over the proverbial edge. And for sure, every startup has a green field/blank slate (insert favorite metaphor) and you can be truly different in all areas - product, service, even organization and management.
In the early days there's the heady rush of creating, the willingness to entertain all ideas even if they're spacey and could go the way of poor Pluto, and everything, even mundane decisions like ordering food for late-night sessions, are considered afresh and optimized. And when it comes to the product, the team's wallowing in research, brain-storming, asking the experts (even if it only your PhD candidate buddies in the local university), seeking customer feedback like it is the wisdom of gurus - freshness is so much the norm that you don't even have to think about it.
Unfortunately the patina of 'legacy' comes on quicker than one would like. The moment you have your 30-second pitch and your first 10-slide PowerPoint preso, you think you've got it all figured out. The moment you finish your prototype, it seems simpler to build on what you already have, even if you'd planned it as a temporary artifact to be scrapped when you start building V1.0. You think you've got the innovation part done and now you can start building.
And to be pragmatic, that's exactly what you should do to avoid the dreaded analysis paralysis or all ideas, no artifacts syndrome. But, but, but....you have to figure out a way to keep it fresh, have a window open to new ideas, new technologies, new input, just new slants to thinking, to make sure your product and company are not getting too rigid too soon. This is not easy to do, especially in an early stage startup when you're juggling so many different priorities with so few resources. But my personal bias is that freshness is one of the key characteristics of a startup and it is much easier to make it part of the culture there. As mentioned earlier, in the early days fresh thinking is pretty much a given - the challenge is making it a conscious practice in order to make sure that it doesn't dissipate with every checked milestone.
There may be no one way to do this, and to be effective, it is best to be open to input from non-typical sources. I recently attended a workshop at Stanford on a subject that was in the general space of the venture I'm pursuing, but didn't come anywhere close - but I found it made me think along very different lines and I was able to translate it to a new, richer perspective of the product offering. I am not sure how much of it I will use and when, but the whole experience was worth it just for expanding my thinking. And at the other end of the experience spectrum, a casual conversation with someone I barely knew at a networking event sparked an idea for a cool new feature.
I really hope to keep the innovation going and keep pushing the 'best if used by' date out further in all that I do, and to help me in this, have started reading a couple of books on the subject in my so-called spare time (results in a future post). I remember, when I first saw Apple's 'THINK DIFFERENT' plastered on the side of their corporate headquarters a few years ago, I found it faintly irritating as I felt it should be 'Think Differently' . But there's no denying Steve Jobs (and whoever came up with the phrase) is a genius. It took only a couple of drive-bys for me to get past the constraints of grammar and realize that the meaning is the message, and brilliantly so - a message worth remembering in the pursuit of freshness.
In the early days there's the heady rush of creating, the willingness to entertain all ideas even if they're spacey and could go the way of poor Pluto, and everything, even mundane decisions like ordering food for late-night sessions, are considered afresh and optimized. And when it comes to the product, the team's wallowing in research, brain-storming, asking the experts (even if it only your PhD candidate buddies in the local university), seeking customer feedback like it is the wisdom of gurus - freshness is so much the norm that you don't even have to think about it.
Unfortunately the patina of 'legacy' comes on quicker than one would like. The moment you have your 30-second pitch and your first 10-slide PowerPoint preso, you think you've got it all figured out. The moment you finish your prototype, it seems simpler to build on what you already have, even if you'd planned it as a temporary artifact to be scrapped when you start building V1.0. You think you've got the innovation part done and now you can start building.
And to be pragmatic, that's exactly what you should do to avoid the dreaded analysis paralysis or all ideas, no artifacts syndrome. But, but, but....you have to figure out a way to keep it fresh, have a window open to new ideas, new technologies, new input, just new slants to thinking, to make sure your product and company are not getting too rigid too soon. This is not easy to do, especially in an early stage startup when you're juggling so many different priorities with so few resources. But my personal bias is that freshness is one of the key characteristics of a startup and it is much easier to make it part of the culture there. As mentioned earlier, in the early days fresh thinking is pretty much a given - the challenge is making it a conscious practice in order to make sure that it doesn't dissipate with every checked milestone.
There may be no one way to do this, and to be effective, it is best to be open to input from non-typical sources. I recently attended a workshop at Stanford on a subject that was in the general space of the venture I'm pursuing, but didn't come anywhere close - but I found it made me think along very different lines and I was able to translate it to a new, richer perspective of the product offering. I am not sure how much of it I will use and when, but the whole experience was worth it just for expanding my thinking. And at the other end of the experience spectrum, a casual conversation with someone I barely knew at a networking event sparked an idea for a cool new feature.
I really hope to keep the innovation going and keep pushing the 'best if used by' date out further in all that I do, and to help me in this, have started reading a couple of books on the subject in my so-called spare time (results in a future post). I remember, when I first saw Apple's 'THINK DIFFERENT' plastered on the side of their corporate headquarters a few years ago, I found it faintly irritating as I felt it should be 'Think Differently' . But there's no denying Steve Jobs (and whoever came up with the phrase) is a genius. It took only a couple of drive-bys for me to get past the constraints of grammar and realize that the meaning is the message, and brilliantly so - a message worth remembering in the pursuit of freshness.
Role playing
You'd think that it is pretty simple to staff an early stage startup (of the software kind) at launch. A CTO/Architect/VPE, a VP of Marketing and a VP of Biz Dev/Sales (though this function could wait until the product is close to being ready), a few engineers to build the product, and a CEO to pull it all together (other functions like hr/finance could be contracted out until later) - that should about do it.
But the script isn't always so simple. What needs to get done and the roles to be played at the very early stage depend on the product/service/delivery and how well-defined it is. Sometimes the venture is built around building a better mousetrap, in which case the roles/responsibilities are clearer. But if you're framing something new, it will most certainly morph based on market, technology, investors (yes, it happens) and of course the team itself, so who you bring to the team and the role they would play is important. It also depends a lot on who the customer will be - selling to an IT manager in a mid-sized corporation will need a different mindset than selling to pre-teen girls (and the person who's credible talking to one may not have cred with the other).
The other factor is how well you know the capabilities of the people you bring on board. Resumes don't tell you the whole story, and are often helpful only when you're looking at a 'standard role' like that of VP of Engineering. If you're aiming for someone who can be hands-on and manage the development, there are a whole bunch of people out there. If you also expect them to so some design, the number shrinks considerably, and if they should be able to talk sensibly to customer groups and contribute to product direction (because, at this stage you'd better have design, development and customer research all working closely together) - your available pool just got to bathtub size, and if you factor in the requirement about joining at the very early stage and working for equity, you've just skinnied it down to a bird-bath. So you have to figure out a way to (1) find this small set of available people and (2) suss out which of them could take on the role of a generalist while boasting a proven track record as a specialist.
And lastly, once you figure out the right person, you have to play the all important name game - what's the title of the role(s) to be played. It has to be both attractive as well as appropriate. Practically everyone thinks they have to be a 'C' something or the other if they join a startup, but does their experience really warrant it? And should the person doing the design based on user-feedback be in 'product marketing' or in 'architecture' as they'll be doing both? Possibly whichever one they hope to do long term, as long as they're aware they have to do both at the beginning (I'm partial to 'product design' myself). And frankly, it would be a great to have a relatively flat organization and avoid all the hassles of which function reports where - though that works only with the right team.
The important thing is that this is not just about the founder/entrepreneur's challenge in building the team, it is about the challenges that each individual team member has to take on. If you're expecting your marketing person to handle all aspects of marketing, advertising as well as sales, biz dev and managing product definition, s/he should know what's expected and should want to get on this ride. If the startup's an ensemble group, it helps enormously to have willing actors who at least know what their roles are about and what the cues are going to be before the enter the stage - and yes, it's an improv, with the ensemble making up the script as they go along.
But the script isn't always so simple. What needs to get done and the roles to be played at the very early stage depend on the product/service/delivery and how well-defined it is. Sometimes the venture is built around building a better mousetrap, in which case the roles/responsibilities are clearer. But if you're framing something new, it will most certainly morph based on market, technology, investors (yes, it happens) and of course the team itself, so who you bring to the team and the role they would play is important. It also depends a lot on who the customer will be - selling to an IT manager in a mid-sized corporation will need a different mindset than selling to pre-teen girls (and the person who's credible talking to one may not have cred with the other).
The other factor is how well you know the capabilities of the people you bring on board. Resumes don't tell you the whole story, and are often helpful only when you're looking at a 'standard role' like that of VP of Engineering. If you're aiming for someone who can be hands-on and manage the development, there are a whole bunch of people out there. If you also expect them to so some design, the number shrinks considerably, and if they should be able to talk sensibly to customer groups and contribute to product direction (because, at this stage you'd better have design, development and customer research all working closely together) - your available pool just got to bathtub size, and if you factor in the requirement about joining at the very early stage and working for equity, you've just skinnied it down to a bird-bath. So you have to figure out a way to (1) find this small set of available people and (2) suss out which of them could take on the role of a generalist while boasting a proven track record as a specialist.
And lastly, once you figure out the right person, you have to play the all important name game - what's the title of the role(s) to be played. It has to be both attractive as well as appropriate. Practically everyone thinks they have to be a 'C' something or the other if they join a startup, but does their experience really warrant it? And should the person doing the design based on user-feedback be in 'product marketing' or in 'architecture' as they'll be doing both? Possibly whichever one they hope to do long term, as long as they're aware they have to do both at the beginning (I'm partial to 'product design' myself). And frankly, it would be a great to have a relatively flat organization and avoid all the hassles of which function reports where - though that works only with the right team.
The important thing is that this is not just about the founder/entrepreneur's challenge in building the team, it is about the challenges that each individual team member has to take on. If you're expecting your marketing person to handle all aspects of marketing, advertising as well as sales, biz dev and managing product definition, s/he should know what's expected and should want to get on this ride. If the startup's an ensemble group, it helps enormously to have willing actors who at least know what their roles are about and what the cues are going to be before the enter the stage - and yes, it's an improv, with the ensemble making up the script as they go along.
The power of equity
Everyone knows that you need to give out gobs of stock for the early-stage team, the first 3 - 5 members who're willing to get your idea off the ground. Of course, if you were able to pay them a good salary and can convince them their jobs are secure for awhile you wouldn't need to do so - but lacking a cash compensation, which is standard ops for most startups, it's the equity that will bring them in. Nothing new there.
What are you really offering with equity? The stock is pretty much worthless when you just get started (even on paper the so-called fair market value is only a fraction of dollar). But there is the hope and potential that it will be worth a Carrera, some beachfront property and, most importantly, a letter of resignation - if you and your team are able to deliver.
I recently had an 'a-ha' moment: equity is not only a way to attract the right person to your team, it is a way to dissuade the wrong person from joining your team. Though you have less invested and created little of value at this stage, paradoxically the impact of a wrong hire is highly significant (later on, with more people on board, you have a little more wiggle-room if you've made an injudicious choice). When you're making an offer to someone who'll be part of a five-person or smaller team, both of you know that he will directly impact the future value of the stock. So this person has to feel confident in her ability to deliver - and if she has any doubts about that, she'll know that all the many thousands of shares may amount to nothing more than shredder-fodder. So, assuming that you're working with someone with smarts and a desire for success, she'd most certainly withdraw if she's less than 100% confident in her ability to deliver. And that is a very good thing.
Of course, this will not work as well in a consulting or 'try and then buy' approach, because both parties are avoiding commitment and consequently are unlikely to take on anything of significance. And of course, you still have to go through the usual due diligence. But, as the final test, offer enough equity to make it worth their while - and the ones who're unsure of themselves will walk away, while those who're confident they can make the magic happen, will leap at the opportunity. I've seen it work - the early stagers know that the pot of gold at the end of the rainbow is only as real and as large as they can make it, and if they can't do it, they'll veer off to another yellow brick road (to merrily mix metaphors).
What are you really offering with equity? The stock is pretty much worthless when you just get started (even on paper the so-called fair market value is only a fraction of dollar). But there is the hope and potential that it will be worth a Carrera, some beachfront property and, most importantly, a letter of resignation - if you and your team are able to deliver.
I recently had an 'a-ha' moment: equity is not only a way to attract the right person to your team, it is a way to dissuade the wrong person from joining your team. Though you have less invested and created little of value at this stage, paradoxically the impact of a wrong hire is highly significant (later on, with more people on board, you have a little more wiggle-room if you've made an injudicious choice). When you're making an offer to someone who'll be part of a five-person or smaller team, both of you know that he will directly impact the future value of the stock. So this person has to feel confident in her ability to deliver - and if she has any doubts about that, she'll know that all the many thousands of shares may amount to nothing more than shredder-fodder. So, assuming that you're working with someone with smarts and a desire for success, she'd most certainly withdraw if she's less than 100% confident in her ability to deliver. And that is a very good thing.
Of course, this will not work as well in a consulting or 'try and then buy' approach, because both parties are avoiding commitment and consequently are unlikely to take on anything of significance. And of course, you still have to go through the usual due diligence. But, as the final test, offer enough equity to make it worth their while - and the ones who're unsure of themselves will walk away, while those who're confident they can make the magic happen, will leap at the opportunity. I've seen it work - the early stagers know that the pot of gold at the end of the rainbow is only as real and as large as they can make it, and if they can't do it, they'll veer off to another yellow brick road (to merrily mix metaphors).
Something in the water
I just got back from a visit to India and one of the most interesting aspects of my trip was the close-up with entrepreneurism there.
First, there's a huge boom in startups in the tech arena in India. This is not new news. It is pretty well covered and there seems to be a news story every week on yet another US-based VC firm that's setting up an India office (ditto for China by the way). But what really interested me is that now there are more startups that plan to sell in India, and then maybe expand globally. Granted, the US in general and the Silicon Valley in particular, may have the edge in conditions for launching successful startups - check out Paul Graham's views and Guy Kawasaki's too for fun - but the Indian entrepreneurs aren't sitting around drinking chai and waiting for the conditions to improve. They're jumping right in.
Second, entrepreneurism is booming in all areas, not just tech: services, healthcare, education, transportation, you name it. And of course there are numerous and much-needed non-profits for various social causes where financial gain is clearly not the raison d'etre. Just casual conversations with friends and chance-met strangers were enough to show me the amazing pervasiveness of entrepreneurism.
Which led me to ponder: does the environment in India have something special to develop the entrepreneurial spirit? True, with a population of over a billion, even if one percent had an entrepreneurial bent, it will have a huge impact. But I see a general hustle across many demographics, even the taxi driver who makes less than $100 a month was hatching some schemes for his own business.
The most striking aspect of all the new stuff that's happening in India is that it's happening at all - given the unreliable infrastructure. An entrepreneur here in Silicon Valley would worry about the big stuff: team, funding, market and the like, but not so much about power outages every other day, transportation strikes/political riots that paralyze all movement, and folks having to spend hours to get to work through blistering heat, torrential monsoons and interminable traffic jams. Yes, the infrastructure is much better now than it was a few years ago, it is improving constantly, and the big guys have put in all kinds of redundancies, but you'd never take it for granted. And yet, the Indian entrepreneur just barrels along, and somehow makes it work. One of the instances of this supreme optimism that I found particularly striking was in healthcare. Enterprising doctors take the leap in bringing the latest in medical technology to India and making it successful enough to attract patients from all over the world. Lack of knowledgeable staff, decades-old facilities, flaky infrastructure, bloated bureaucracy - it would have been very easy to look at all this and conclude 'no way'. Most investors here would do so. But not so in India. What looks like an insurmountable obstacle is just another item to be taken care of - no big deal, some hard work and chutzpah will take care of it.
These entrepreneurs are really starting from scratch most of the time and are unfazed by it. Double the risk, double the work, but single-minded focus. And I have a theory on why it is so. In India the entrepreneur is still hungry. With a billion plus people, competition is fierce (it seems to start in kindergarten), and shirking from an opportunity just because you have to take care of everything yourself would make you a loser. If you're an entrepreneur visiting India, go ahead and drink the water (so to speak). Maybe you'll get hungry too.
First, there's a huge boom in startups in the tech arena in India. This is not new news. It is pretty well covered and there seems to be a news story every week on yet another US-based VC firm that's setting up an India office (ditto for China by the way). But what really interested me is that now there are more startups that plan to sell in India, and then maybe expand globally. Granted, the US in general and the Silicon Valley in particular, may have the edge in conditions for launching successful startups - check out Paul Graham's views and Guy Kawasaki's too for fun - but the Indian entrepreneurs aren't sitting around drinking chai and waiting for the conditions to improve. They're jumping right in.
Second, entrepreneurism is booming in all areas, not just tech: services, healthcare, education, transportation, you name it. And of course there are numerous and much-needed non-profits for various social causes where financial gain is clearly not the raison d'etre. Just casual conversations with friends and chance-met strangers were enough to show me the amazing pervasiveness of entrepreneurism.
Which led me to ponder: does the environment in India have something special to develop the entrepreneurial spirit? True, with a population of over a billion, even if one percent had an entrepreneurial bent, it will have a huge impact. But I see a general hustle across many demographics, even the taxi driver who makes less than $100 a month was hatching some schemes for his own business.
The most striking aspect of all the new stuff that's happening in India is that it's happening at all - given the unreliable infrastructure. An entrepreneur here in Silicon Valley would worry about the big stuff: team, funding, market and the like, but not so much about power outages every other day, transportation strikes/political riots that paralyze all movement, and folks having to spend hours to get to work through blistering heat, torrential monsoons and interminable traffic jams. Yes, the infrastructure is much better now than it was a few years ago, it is improving constantly, and the big guys have put in all kinds of redundancies, but you'd never take it for granted. And yet, the Indian entrepreneur just barrels along, and somehow makes it work. One of the instances of this supreme optimism that I found particularly striking was in healthcare. Enterprising doctors take the leap in bringing the latest in medical technology to India and making it successful enough to attract patients from all over the world. Lack of knowledgeable staff, decades-old facilities, flaky infrastructure, bloated bureaucracy - it would have been very easy to look at all this and conclude 'no way'. Most investors here would do so. But not so in India. What looks like an insurmountable obstacle is just another item to be taken care of - no big deal, some hard work and chutzpah will take care of it.
These entrepreneurs are really starting from scratch most of the time and are unfazed by it. Double the risk, double the work, but single-minded focus. And I have a theory on why it is so. In India the entrepreneur is still hungry. With a billion plus people, competition is fierce (it seems to start in kindergarten), and shirking from an opportunity just because you have to take care of everything yourself would make you a loser. If you're an entrepreneur visiting India, go ahead and drink the water (so to speak). Maybe you'll get hungry too.
Corporate shift to entrepreneurial values?
It was fun to read the article on the new rules for companies - as opposed to Jack Welch's old rules - in this week's Fortune. In particular, I got a big kick out of Rule #5: Hire Passionate People. This is intended to replace the old rule of hiring only the A crowd and firing the the C's (while the B's madly tried to move up the alphabet chain).
Of course, entrepreneurs are all about passion, and I've been discussing it in this blog frequently. In fact, one of the recent posts 'Deluded by passion?' is about the feasibility of being passionate about a corporate job, and proposes yes, it is possible to be passionate about your role and what you do, though the corporate goal may be less than electrifying. So it was interesting to read about the big companies trying to get 'passion' into their interview checklists, but in all fairness, some of them have always done so, not just because it is the current fad - Apple for one has a history of favoring passion in its hires.
The other rule that stood out was Rule #2: Find a Niche, Create Something New. Again, this is how entrepreneurs thrive - or stay in the game, as pointed out in One Size Doesn't Fit All. When you're just getting started, you're not consumed with being #1, you're fighting to stay alive and finding customers rooting through under-served niches.
Which bring us to Rule #3: The Customer is King. It was shocking to read the disconnect between executive and customer perception on service. On the other hand, it is almost impossible to find a startup that is not obsessive about its customers - they jump through so many hoops to attract and retain their customers they could be auditioning for Cirque de Soleil. A point of interest - the old rule was that 'shareholders rule'. There could be some of that in funded startups too where investors may drive the agenda and literally rule, but usually any investor who's had operational experience is unlikely to slip on the customer focus.
All in all, I must confess to a certain smugness on reading this article and seeing the startup values moving into the rulebooks of the corporate giants. It's a vindication (maybe these are not 'niche' values after all) and it also offers hope that the big guys will remember their roots and what being in business is all about.
Of course, entrepreneurs are all about passion, and I've been discussing it in this blog frequently. In fact, one of the recent posts 'Deluded by passion?' is about the feasibility of being passionate about a corporate job, and proposes yes, it is possible to be passionate about your role and what you do, though the corporate goal may be less than electrifying. So it was interesting to read about the big companies trying to get 'passion' into their interview checklists, but in all fairness, some of them have always done so, not just because it is the current fad - Apple for one has a history of favoring passion in its hires.
The other rule that stood out was Rule #2: Find a Niche, Create Something New. Again, this is how entrepreneurs thrive - or stay in the game, as pointed out in One Size Doesn't Fit All. When you're just getting started, you're not consumed with being #1, you're fighting to stay alive and finding customers rooting through under-served niches.
Which bring us to Rule #3: The Customer is King. It was shocking to read the disconnect between executive and customer perception on service. On the other hand, it is almost impossible to find a startup that is not obsessive about its customers - they jump through so many hoops to attract and retain their customers they could be auditioning for Cirque de Soleil. A point of interest - the old rule was that 'shareholders rule'. There could be some of that in funded startups too where investors may drive the agenda and literally rule, but usually any investor who's had operational experience is unlikely to slip on the customer focus.
All in all, I must confess to a certain smugness on reading this article and seeing the startup values moving into the rulebooks of the corporate giants. It's a vindication (maybe these are not 'niche' values after all) and it also offers hope that the big guys will remember their roots and what being in business is all about.
One size doesn't fit all
If you've ever pitched your idea to someone, you'd have experienced this. The eyes veer off to the side, there might be a small pursing of the lips closing round a 'hmmm' or two. You can almost see little gear-thingies or neurons or whatever coming to life as they ponder the question "what does this remind me of? what is this like?".
This desire to seek similarities, it's a very human trait. It seems to help in our understanding, and we use it a lot when describing things to others. "Like" is probably one of most commonly used prepositions - and not just by pre-teen girls. 'Lost' is like 'X-Files' and 'Survivor' mashed-up (or not). A 'dosa' is like an Indian crepe. Shutterfly is like Snapfish. Google is like Yahoo - wait, no it isn't, it's like MicroSoft, no it isn't, or is it like (this could go on for a while).
This is not a bad thing, after all it helps promote understanding. But there is a side effect. When you try to judge a business idea by what it is 'like', your view of it is informed by the connection. This may actually have the unlooked for effect of causing you to misunderstand the idea, which in turn could cause you to dismiss the idea as one that's been done already.
As an entrepreneur, you have to hold on to some simple truths. One, if you have an idea that has a chance of working, most likely someone has already done something that is 'like' it. And that could be a good thing - it won't be your blood on the proverbial edge. Two, even if there's an established player, you may very well be on to something better with your approach. Case in point, the afore-mentioned Google, a late entrant to the search engine space which already had its share of 800-lb primates. Three, seek the differentiation in the niches served. There are very few truly universal solutions. With 6 billion plus people on earth, that's not hard to believe. Four, if you find competition in your niche, if in fact "it's been done already", you still have one more option - get to know your customers, really really well.
I'm going through this almost on a daily basis, and I'm not only learning to tell a better story, I'm getting to be a better listener when a fellow entrepreneur tells his. It helps to remember that 'similar' doesn't mean 'same' and there is a market full of Goldilocks out there looking for just the right fit.
This desire to seek similarities, it's a very human trait. It seems to help in our understanding, and we use it a lot when describing things to others. "Like" is probably one of most commonly used prepositions - and not just by pre-teen girls. 'Lost' is like 'X-Files' and 'Survivor' mashed-up (or not). A 'dosa' is like an Indian crepe. Shutterfly is like Snapfish. Google is like Yahoo - wait, no it isn't, it's like MicroSoft, no it isn't, or is it like (this could go on for a while).
This is not a bad thing, after all it helps promote understanding. But there is a side effect. When you try to judge a business idea by what it is 'like', your view of it is informed by the connection. This may actually have the unlooked for effect of causing you to misunderstand the idea, which in turn could cause you to dismiss the idea as one that's been done already.
As an entrepreneur, you have to hold on to some simple truths. One, if you have an idea that has a chance of working, most likely someone has already done something that is 'like' it. And that could be a good thing - it won't be your blood on the proverbial edge. Two, even if there's an established player, you may very well be on to something better with your approach. Case in point, the afore-mentioned Google, a late entrant to the search engine space which already had its share of 800-lb primates. Three, seek the differentiation in the niches served. There are very few truly universal solutions. With 6 billion plus people on earth, that's not hard to believe. Four, if you find competition in your niche, if in fact "it's been done already", you still have one more option - get to know your customers, really really well.
I'm going through this almost on a daily basis, and I'm not only learning to tell a better story, I'm getting to be a better listener when a fellow entrepreneur tells his. It helps to remember that 'similar' doesn't mean 'same' and there is a market full of Goldilocks out there looking for just the right fit.
Deluded on passion?
A few days after I'd made the post on finding others with similar passions, I happened to read Jon Carroll's column in the San Francisco Chronicle (June 22, 2006). I really like his columns when I do read them, though admittedly it is not on a daily basis.
It was an amusing and timely (to me) column. He'd quoted Nancy Friedman's post 'Our Passion is Your Problem' - which was an entertaining read too. She (and Carroll) focus on the obvious disconnect between corporate words (aka marketing) and corporate actions. Yes, it is hard to believe that everyone in a large corporation making widgets is passionate about their work, and honestly, most corporations are passionate only about the bottom line. They may specialize in pharma, beauty products, earth movers, whatever - drumming up 'passion' for the speciality is a often hype for maintaining focus in their specific business.
But, when I read the statement 'I know no one who approaches the daily grind with passion' it gave me pause. While it may be true if what you do is a grind, but there are many, many people out there who're fired up about their jobs and don't think of work as a chore. If what you're doing is interesting to you, and you're working with good people, at the very least you're not dragging yourself to work, and most likely you're looking forward to it. Personally, even when I was in the corporate world, there were long periods of time when I was absolutely consumed by, and loving, what I was doing, and couldn't think of a better word than passion to describe my feeling.
Then there's the entrepreneurial angle. I've mentioned passion as being non-negotiable for an entrepreneur about a kazillion times and see it proven true almost on a daily basis. In fact, entrepreneurs don't lose their passion even when their companies become large corporations. Examples are obvious and plentiful - Ford, Gates, Jobs, etc. They insist on passionate people by their side when they're starting out, and will most likely continue to favor them as they grow, though the focus of passion may change.
Discounting the excesses of marketing speak in other arenas, in the entrepreneurial world, looking for people who're passionate about their work is not a fantasy quest - and not doing so could lead to dire results.
It was an amusing and timely (to me) column. He'd quoted Nancy Friedman's post 'Our Passion is Your Problem' - which was an entertaining read too. She (and Carroll) focus on the obvious disconnect between corporate words (aka marketing) and corporate actions. Yes, it is hard to believe that everyone in a large corporation making widgets is passionate about their work, and honestly, most corporations are passionate only about the bottom line. They may specialize in pharma, beauty products, earth movers, whatever - drumming up 'passion' for the speciality is a often hype for maintaining focus in their specific business.
But, when I read the statement 'I know no one who approaches the daily grind with passion' it gave me pause. While it may be true if what you do is a grind, but there are many, many people out there who're fired up about their jobs and don't think of work as a chore. If what you're doing is interesting to you, and you're working with good people, at the very least you're not dragging yourself to work, and most likely you're looking forward to it. Personally, even when I was in the corporate world, there were long periods of time when I was absolutely consumed by, and loving, what I was doing, and couldn't think of a better word than passion to describe my feeling.
Then there's the entrepreneurial angle. I've mentioned passion as being non-negotiable for an entrepreneur about a kazillion times and see it proven true almost on a daily basis. In fact, entrepreneurs don't lose their passion even when their companies become large corporations. Examples are obvious and plentiful - Ford, Gates, Jobs, etc. They insist on passionate people by their side when they're starting out, and will most likely continue to favor them as they grow, though the focus of passion may change.
Discounting the excesses of marketing speak in other arenas, in the entrepreneurial world, looking for people who're passionate about their work is not a fantasy quest - and not doing so could lead to dire results.
Shared interests
I might have mentioned that the idea I'm currently developing has 'social impact'. Yes, it could fall under the 'social venture' category and I could be considered a social entrepreneur, though I feel that since I'm aiming to build a for-profit organization, I'm not in the same league as those with a calling for pure service. But, as I'm building software, it appears to be more sensible to go the for-profit route, and plan to support non-profits and other deserving but under-resourced users.
Anyway, since this venture has a social goal, I'm all the more driven to make sure that the early stage team members have the same level of commitment to the cause as I do. And they have to be passionate about this cause - affinity to other causes, while praiseworthy, chill my interest to lukewarm at best.
Case in point. I was recently assessing a candidate who's had the relevant experience and is very interested in getting in at the 'root level' of another startup, preferably one that's capable of 'doing some good'. I really liked his attitude, approach, skills, but noticed a niggling worm of doubt that insinuated itself into my otherwise general feeling of euphoria - the guy was more D-caffeinated than A-buzz when it came to my mission. At the same time I was talking to a couple of others, who had slightly different skills, but were totally fired up - they came back to me with suggestions, questions, what-if's, all indications that they were fully warmed up to this cause. The difference couldn't have been more striking. So, when guy #1 told me that he's leaning more towards another venture in a different space, my first thought was "Whew, thanks!" as it removed the possibility of a wrong choice.
Why was there even a possibility of a wrong choice? Sticking to your mantras is not always easy. No matter how many times I have reiterated that I need people with fire in their bellies, when faced with the possibility of a really good candidate who had everything but that, it was not a (cake) walk-away. I actually spent time considering if I was being too rigid about the criteria - surely he could get converted to the cause if I evangelized strongly enough? Thankfully this miasma didn't last for more than a day.
Maybe this is not so much of an issue if your goal is to squeeze out another one-hundreth of a percent point in productivity for a large corporation (the new new thing in demand chain optimization?). In that case you're looking for those who're committed to, and passionate about, their roles - architect, engineer, sales, biz dev, whatever - but the mission itself, not so much. But if you're looking to do something to help disadvantaged kids for example, you want your team to be revved up about that goal and not itching to tinker with sustainable farming instead. Both laudable, but you can launch only one rocketship - for now.
Anyway, since this venture has a social goal, I'm all the more driven to make sure that the early stage team members have the same level of commitment to the cause as I do. And they have to be passionate about this cause - affinity to other causes, while praiseworthy, chill my interest to lukewarm at best.
Case in point. I was recently assessing a candidate who's had the relevant experience and is very interested in getting in at the 'root level' of another startup, preferably one that's capable of 'doing some good'. I really liked his attitude, approach, skills, but noticed a niggling worm of doubt that insinuated itself into my otherwise general feeling of euphoria - the guy was more D-caffeinated than A-buzz when it came to my mission. At the same time I was talking to a couple of others, who had slightly different skills, but were totally fired up - they came back to me with suggestions, questions, what-if's, all indications that they were fully warmed up to this cause. The difference couldn't have been more striking. So, when guy #1 told me that he's leaning more towards another venture in a different space, my first thought was "Whew, thanks!" as it removed the possibility of a wrong choice.
Why was there even a possibility of a wrong choice? Sticking to your mantras is not always easy. No matter how many times I have reiterated that I need people with fire in their bellies, when faced with the possibility of a really good candidate who had everything but that, it was not a (cake) walk-away. I actually spent time considering if I was being too rigid about the criteria - surely he could get converted to the cause if I evangelized strongly enough? Thankfully this miasma didn't last for more than a day.
Maybe this is not so much of an issue if your goal is to squeeze out another one-hundreth of a percent point in productivity for a large corporation (the new new thing in demand chain optimization?). In that case you're looking for those who're committed to, and passionate about, their roles - architect, engineer, sales, biz dev, whatever - but the mission itself, not so much. But if you're looking to do something to help disadvantaged kids for example, you want your team to be revved up about that goal and not itching to tinker with sustainable farming instead. Both laudable, but you can launch only one rocketship - for now.
Chicken or choice
There's a comment on a previous post (Risk in Business - Part II) where anonymous asks if not jumping into entrepreneurship due to family obligations is being chicken or making a responsible choice. This is so often the subject of much angst and insomnia that I feel like devoting a post, instead of just 2-liner response, to it.
First, I wouldn't recommend anyone put their startup above their family (but at the same level, hmm...). Check out Guy Kawasaki's position that high housing prices foster startups as cheaper housing encourages young people to buy houses sooner, and have kids, and then all thoughts of startups go bye-bye. Seriously, at the end of the day (the day that comes when you're 80 some years old), if you've done a great startup but mucked up your relationships, you're going to be one sad, lonely old soul wishing you had a do-over. No question there.
Second, not everyone is an entrepreneur, just as not everyone's a doctor or athlete or bagpipe player. For another view, check out this blog post by an entrepreneur who's quite spirited about it. In short, having some entrepreneurial qualities doesn't automatically make you one.
Going back to the chicken question, anonymous mentioned having an idea and the urge, but setting these aside to pay the bills. My response is simple, go back to the fundamentals - having an idea is not enough, you have to be passionate about it. Otherwise, it is just something that you're contemplating on lazy Sunday afternoons, along with exotic vacations and fantasy homes. On the other hand, if the idea has real meaning for you, you'll find you can't just set it aside. If you're passionate about it, you'll figure out fairly soon that you cannot sustain your relationships if you don't indulge your passion, however slightly - it is not an 'either/or' but an 'and'. From there, it is not a big leap to think about how to carve out time to develop your idea while keeping your job, how you can find someone else to work with you on it, etc. etc. As I'd mentioned in a previous post Moonlighting, this is pretty much standard operating procedure for most entrepreneurs when they're just getting started. You may have heard of how Wozniak kept his job for a year or so while getting Apple off the ground, and he's not the only one. I personally know a bunch of people who're developing their ideas while bringing home paychecks from their 'regular' jobs, working to get to the point when they can make the switch. There's one young man who's working on his idea, usually late at night, while maintaining a full time job, and helping his wife get her own business off the ground while managing their young family - and he doesn't consider any of it a chore or an energy drain at all, because he's so excited about it. I don't believe this phenomenon is necessarily limited to youth or high-tech startups. There are a lot of middle-aged, and older, folks who don't have the luxury of quitting their jobs, but have goals that they want to pursue, doing the same thing - they don't park their dreams, they just keep it in low gear, and keep working towards the day when they can kick it up.
In my view, not going after your idea is not a matter of being chicken or making a choice to be responsible. It is a matter of not feeling fired up, just slightly warm, at the thought of it.
First, I wouldn't recommend anyone put their startup above their family (but at the same level, hmm...). Check out Guy Kawasaki's position that high housing prices foster startups as cheaper housing encourages young people to buy houses sooner, and have kids, and then all thoughts of startups go bye-bye. Seriously, at the end of the day (the day that comes when you're 80 some years old), if you've done a great startup but mucked up your relationships, you're going to be one sad, lonely old soul wishing you had a do-over. No question there.
Second, not everyone is an entrepreneur, just as not everyone's a doctor or athlete or bagpipe player. For another view, check out this blog post by an entrepreneur who's quite spirited about it. In short, having some entrepreneurial qualities doesn't automatically make you one.
Going back to the chicken question, anonymous mentioned having an idea and the urge, but setting these aside to pay the bills. My response is simple, go back to the fundamentals - having an idea is not enough, you have to be passionate about it. Otherwise, it is just something that you're contemplating on lazy Sunday afternoons, along with exotic vacations and fantasy homes. On the other hand, if the idea has real meaning for you, you'll find you can't just set it aside. If you're passionate about it, you'll figure out fairly soon that you cannot sustain your relationships if you don't indulge your passion, however slightly - it is not an 'either/or' but an 'and'. From there, it is not a big leap to think about how to carve out time to develop your idea while keeping your job, how you can find someone else to work with you on it, etc. etc. As I'd mentioned in a previous post Moonlighting, this is pretty much standard operating procedure for most entrepreneurs when they're just getting started. You may have heard of how Wozniak kept his job for a year or so while getting Apple off the ground, and he's not the only one. I personally know a bunch of people who're developing their ideas while bringing home paychecks from their 'regular' jobs, working to get to the point when they can make the switch. There's one young man who's working on his idea, usually late at night, while maintaining a full time job, and helping his wife get her own business off the ground while managing their young family - and he doesn't consider any of it a chore or an energy drain at all, because he's so excited about it. I don't believe this phenomenon is necessarily limited to youth or high-tech startups. There are a lot of middle-aged, and older, folks who don't have the luxury of quitting their jobs, but have goals that they want to pursue, doing the same thing - they don't park their dreams, they just keep it in low gear, and keep working towards the day when they can kick it up.
In my view, not going after your idea is not a matter of being chicken or making a choice to be responsible. It is a matter of not feeling fired up, just slightly warm, at the thought of it.
Be bop
The entrepreneur's world can seem very simplistic at times, as the same few factors seem to influence almost everything you do.
For example commitment. Just in this blog, I must have used that word in practically every post. I have a particular partiality to the concept - case in point, the post The Right Stuff - as do almost all entrepreneurs (I've already mentioned Paul Graham's views multiple times, for another view check out Anita Roddick). And of course, commitment stems from passion, which is another recurring theme in any entrepreneurial discourse. Keep in mind both of these are non-negotiable for an entrepreneur. Can they be developed? Yes. Taught? No.
As I'm continuing the validation effort (which is pretty much continuous in the early stages), I talk to potential customers of course, but, every now and then I run into 'big guns' and 'luminaries' who want to know about my venture, and I think it may be a good idea to get their input - after all, they're movers/shakers. I had one such encounter recently and found myself sitting there thinking "Huh? What happened here?". Mr. Mover/Shaker was interested in the space and had spent many years developing the interest, but he also had very strong opinions on how things should be done, and bottom line, my idea did not fit into his view - slam!
My first thought was that I had effectively deluded myself. Here was a very smart, successful person - in the luminary continuum, he'd be a chandelier to my backlit cellphone - who thought my idea was a no-go. Maybe despite all other feedback to the contrary, I should pack it in? But my commitment, that got me this far, wouldn't let me consider that for long. I gave myself an hour to not think before I reviewed what happened (that was hard by the way). I analyzed the response, and came to the conclusion that (a) he had some passions of his own (a) he didn't quite understand what I was talking about - which could be my positioning, or not and (c) my luminary metaphor may have something going for it. The good news is that I ended up getting a lot clearer about what my idea is not and will never be. So the questioning of my vision actually ended up strengthening it.
Coincidentally (or otherwise?), a couple of days after this conversation I attended an event with a speech on volunteerism by Christine Comaford Lynch. While her speech was on volunteerism, she couldn't avoid her other favorite topic, entrepreneurism, and wove a little of it into her speech. One thing she talked about was the 'anti-mentors', those who say you can't do what you want to, and how you shouldn't let them deflect your focus, though you could learn from them. I was listening with a smile on my face as the word 'anti-mentor' made me think of dementor (yes, I'm a JK Rowling fan) and how one could suck away the zest out of you. An extreme metaphor, admittedly. Anyhow, you're entirely capable of not letting that happen. Think of your vision (and your entrepreneurial self) as one of those 'bop bags' you find in kids' rooms (and in many cubicles!). The nay-sayers can't let the air out as you have back-up inflation with your commitment and passion. They can knock you, but you bop right back. Be bop.
For example commitment. Just in this blog, I must have used that word in practically every post. I have a particular partiality to the concept - case in point, the post The Right Stuff - as do almost all entrepreneurs (I've already mentioned Paul Graham's views multiple times, for another view check out Anita Roddick). And of course, commitment stems from passion, which is another recurring theme in any entrepreneurial discourse. Keep in mind both of these are non-negotiable for an entrepreneur. Can they be developed? Yes. Taught? No.
As I'm continuing the validation effort (which is pretty much continuous in the early stages), I talk to potential customers of course, but, every now and then I run into 'big guns' and 'luminaries' who want to know about my venture, and I think it may be a good idea to get their input - after all, they're movers/shakers. I had one such encounter recently and found myself sitting there thinking "Huh? What happened here?". Mr. Mover/Shaker was interested in the space and had spent many years developing the interest, but he also had very strong opinions on how things should be done, and bottom line, my idea did not fit into his view - slam!
My first thought was that I had effectively deluded myself. Here was a very smart, successful person - in the luminary continuum, he'd be a chandelier to my backlit cellphone - who thought my idea was a no-go. Maybe despite all other feedback to the contrary, I should pack it in? But my commitment, that got me this far, wouldn't let me consider that for long. I gave myself an hour to not think before I reviewed what happened (that was hard by the way). I analyzed the response, and came to the conclusion that (a) he had some passions of his own (a) he didn't quite understand what I was talking about - which could be my positioning, or not and (c) my luminary metaphor may have something going for it. The good news is that I ended up getting a lot clearer about what my idea is not and will never be. So the questioning of my vision actually ended up strengthening it.
Coincidentally (or otherwise?), a couple of days after this conversation I attended an event with a speech on volunteerism by Christine Comaford Lynch. While her speech was on volunteerism, she couldn't avoid her other favorite topic, entrepreneurism, and wove a little of it into her speech. One thing she talked about was the 'anti-mentors', those who say you can't do what you want to, and how you shouldn't let them deflect your focus, though you could learn from them. I was listening with a smile on my face as the word 'anti-mentor' made me think of dementor (yes, I'm a JK Rowling fan) and how one could suck away the zest out of you. An extreme metaphor, admittedly. Anyhow, you're entirely capable of not letting that happen. Think of your vision (and your entrepreneurial self) as one of those 'bop bags' you find in kids' rooms (and in many cubicles!). The nay-sayers can't let the air out as you have back-up inflation with your commitment and passion. They can knock you, but you bop right back. Be bop.
The right stuff.
If you haven't done so already, it's worth checking out Paul Graham's lessons on startups. It is on the mark, though you have to make some allowances for his 'web' focus if you're on a different track. One of the lessons he mentions is that the most important quality for a founder is determination, not brains (well, take it to mean that the founder doesn't need to be a genius or even the smartest one in the team). He posits that losing even a little bit of commitment could kill the venture. In a similar vein, I've mentioned on a previous post, The Balancing Act, how the passion and commitment of the entrepreneur is absolutely critical to stick with the venture through all the tough times and creeping doubts.
Extending the concept, I'm of the mind that you need to have passion and commitment in the early stage team too, not just the founder. Two recent incidents have brought this into focus. First, I've recently started looking for the right partners to launch my venture. I don't have a grab-n-go team (a matter of timing - see post on Trolling for teams), so I have to search and select the right people to join me. I found some really good people who're sympatico and find the idea exciting, but they want funding, and a salary. I too remember the hollow promises of the dot-com bust, and sympathize with the need to not worry about rent money. So, I'm OK with folks keeping their jobs and working on this venture on the side for a short while until we can build some value (read product). But this requires commitment, and that's in lockstep with passion. The idea has to hijack the person's heart and mind so much they start thinking it's theirs, and when they've reached that point, moonlighting while working for equity seems like the smart thing to do. Even if you could get the funding, this might be a good litmus test for commitment.
Just a couple of days ago I was in a discussion with an engineer who's currently in a startup. He was comparing the quality of the people who were there in the early days, when the whole company fit into one room, to those who came on board a few months later, on the heels of a substantial investment. He felt the later arrivals were as smart and competent as the ones already there, but they acted differently. They more often needed to be asked to work weekends (while the early stage team took that as the norm) and they didn't often try to do, or get involved, in everything in the company (once again the early team members had to be in the middle of all that went on). Basically, the first-on-board acted as if they owned the company, while the others acted as employees, albeit ones with vested interests in the success of the company.
It's a heady rush to found a team of passionate, committed people who take ownership, or to be part of such a team where you feel you're personally responsible for the future of the venture (and yes, equity comes in play here too). What's more, such a team is a necessity if you want your venture to end up being something more than an expired domain name and a scratched-out business card down the line. It's worth the founder's while to look for someone with the right stuff and make that the highest priority.
Extending the concept, I'm of the mind that you need to have passion and commitment in the early stage team too, not just the founder. Two recent incidents have brought this into focus. First, I've recently started looking for the right partners to launch my venture. I don't have a grab-n-go team (a matter of timing - see post on Trolling for teams), so I have to search and select the right people to join me. I found some really good people who're sympatico and find the idea exciting, but they want funding, and a salary. I too remember the hollow promises of the dot-com bust, and sympathize with the need to not worry about rent money. So, I'm OK with folks keeping their jobs and working on this venture on the side for a short while until we can build some value (read product). But this requires commitment, and that's in lockstep with passion. The idea has to hijack the person's heart and mind so much they start thinking it's theirs, and when they've reached that point, moonlighting while working for equity seems like the smart thing to do. Even if you could get the funding, this might be a good litmus test for commitment.
Just a couple of days ago I was in a discussion with an engineer who's currently in a startup. He was comparing the quality of the people who were there in the early days, when the whole company fit into one room, to those who came on board a few months later, on the heels of a substantial investment. He felt the later arrivals were as smart and competent as the ones already there, but they acted differently. They more often needed to be asked to work weekends (while the early stage team took that as the norm) and they didn't often try to do, or get involved, in everything in the company (once again the early team members had to be in the middle of all that went on). Basically, the first-on-board acted as if they owned the company, while the others acted as employees, albeit ones with vested interests in the success of the company.
It's a heady rush to found a team of passionate, committed people who take ownership, or to be part of such a team where you feel you're personally responsible for the future of the venture (and yes, equity comes in play here too). What's more, such a team is a necessity if you want your venture to end up being something more than an expired domain name and a scratched-out business card down the line. It's worth the founder's while to look for someone with the right stuff and make that the highest priority.
Risk in Business - Part II
I recently heard Marissa Mayer of Google at Stanford's GSB. Being a veritable tech goddess, and from the pantheon of Google, arguably the coolest hot company on the planet at this time, she addressed a large, awed audience. During Q&A she was asked what personal traits made her successful. Her response, to paraphrase, was her affinity for hard work, her desire to be surrounded by extremely smart people and her willingness to get into things that she might not be quite ready for. The last was very intriguing, especially when she gave the example of living in a country without knowing the language.
This is risk-taking too, not a jump off the cliff risk (the kind that makes you give up your steady paycheck to strike out on your own) but in the form of a willingess to be uncomfortable - to get off the cozy couch in the comfort zone. This resonated with me as the best piece of advice I got during my first year in a startup was 'get out of your comfort zone'.
Staying in your comfort zone is a partly due to an aversion to effort, since the new activity is almost always in an area of little interest to you (if it were, it would be inside your zone) and you need to develop the required skills. It is also due to a fear of failure, since you don't have the requisite skills in your back pocket you're afraid you'll fall flat on your face. To kick the attachment to the c-zone, you need another 'c' - confidence. Confidence makes you feel that even if you don't have what it takes to do something right now, you do have what it takes to get it - and get it fast enough to do the job.
Whether it is getting used to making sales calls (my own challenge) or making VC pitches, every entrepreneur will have at least one thing that they're not used to, or don't like doing, or know very little of - but needs to be done for the success of their startup. And you know you'll just have to suck it up and do it. There are two good reasons for getting out of your comfort zone. One, things get easier the more you do them and two, you may actually get to like them as you've blurred the boundaries of your c-zone and brought them in.
This is risk-taking too, not a jump off the cliff risk (the kind that makes you give up your steady paycheck to strike out on your own) but in the form of a willingess to be uncomfortable - to get off the cozy couch in the comfort zone. This resonated with me as the best piece of advice I got during my first year in a startup was 'get out of your comfort zone'.
Staying in your comfort zone is a partly due to an aversion to effort, since the new activity is almost always in an area of little interest to you (if it were, it would be inside your zone) and you need to develop the required skills. It is also due to a fear of failure, since you don't have the requisite skills in your back pocket you're afraid you'll fall flat on your face. To kick the attachment to the c-zone, you need another 'c' - confidence. Confidence makes you feel that even if you don't have what it takes to do something right now, you do have what it takes to get it - and get it fast enough to do the job.
Whether it is getting used to making sales calls (my own challenge) or making VC pitches, every entrepreneur will have at least one thing that they're not used to, or don't like doing, or know very little of - but needs to be done for the success of their startup. And you know you'll just have to suck it up and do it. There are two good reasons for getting out of your comfort zone. One, things get easier the more you do them and two, you may actually get to like them as you've blurred the boundaries of your c-zone and brought them in.
Risk in business.
Earlier on, in a post on definition of an entrepreneur, I'd written about the must-have trait of risk-taking. In the past couple of days I've run across a couple of viewpoints on risk that brought home the fact that risk-taking is not an on or off, black or white thing. It's very individual and situational, and is about one-size-fits-all as a contact lens.
First, I read a blog on corporate entrepreneurship. Yes, that phenomenon exists (I can personally attest to that), and corporations are frequently smitten with the urge to develop 'entrepreneurship', along with its twin 'innovation', in order to stay ahead of the running of the competitive bulls. There was a post in this blog on creating a 'decision-making network' - i.e., managing risk by spreading it to your network within the organization. In the corporate world the decision to take a risk is less likely to be an individual one (management by consensus anyone?). There are steering committees, audit committees, planning committees, strategy councils and of course the BOD (no, not that bod - the board of directors). Anything you take on will most likely fit into some approved master plan. And when you do get the green light, there are enough people to pick and choose for your 'support network' to deliver on the idea. Yes, championing a new initiative may be risky, but it is less likely that it has sudden-death consequences for the company (though getting fired may feel that way to you). Most of all, you don't have the burden of making payroll hanging over your head.
The entrepreneur's risk is a different beast, larger, faster and with more teeth - and lurking within pouncing range. In the early stages the very existence of your business is at risk, and that too on a daily basis. Sudden-death is not an imaginary monster under the bed, but a dwindling cash balance without visibility of revenue or funding. Which is why you do so badly want a founding team. You hope your co-founders will have skin in the game, not so much to lessen the risk, but so you don't have to face it alone. This is not like the network you'd have in a corporation, where you could have the luxury of focusing on the specific project. Here you, and your 'network' (read your whole startup team) have to focus on the survival of the whole business. And just to keep you sharp, you have to simultaneously focus on growth, innovation, and staying ahead of the ever-threatening competition.
The good news is that as the business grows, the visceral impact of the risk lessens - the 'death' is no longer likely to be 'sudden'. You get the warm fuzzies from receivables, and possibly funding, floating you for months at a time. You can keep the edge, but lose the sweat.
If you're a risk-taker in your corporate life, you could possibly be primed to be an entrepreneur too. Just remember that grabbing your tabby's fluffy tail, risking scratched arms and snagged clothing, is nothing like doing the same with a tiger.
First, I read a blog on corporate entrepreneurship. Yes, that phenomenon exists (I can personally attest to that), and corporations are frequently smitten with the urge to develop 'entrepreneurship', along with its twin 'innovation', in order to stay ahead of the running of the competitive bulls. There was a post in this blog on creating a 'decision-making network' - i.e., managing risk by spreading it to your network within the organization. In the corporate world the decision to take a risk is less likely to be an individual one (management by consensus anyone?). There are steering committees, audit committees, planning committees, strategy councils and of course the BOD (no, not that bod - the board of directors). Anything you take on will most likely fit into some approved master plan. And when you do get the green light, there are enough people to pick and choose for your 'support network' to deliver on the idea. Yes, championing a new initiative may be risky, but it is less likely that it has sudden-death consequences for the company (though getting fired may feel that way to you). Most of all, you don't have the burden of making payroll hanging over your head.
The entrepreneur's risk is a different beast, larger, faster and with more teeth - and lurking within pouncing range. In the early stages the very existence of your business is at risk, and that too on a daily basis. Sudden-death is not an imaginary monster under the bed, but a dwindling cash balance without visibility of revenue or funding. Which is why you do so badly want a founding team. You hope your co-founders will have skin in the game, not so much to lessen the risk, but so you don't have to face it alone. This is not like the network you'd have in a corporation, where you could have the luxury of focusing on the specific project. Here you, and your 'network' (read your whole startup team) have to focus on the survival of the whole business. And just to keep you sharp, you have to simultaneously focus on growth, innovation, and staying ahead of the ever-threatening competition.
The good news is that as the business grows, the visceral impact of the risk lessens - the 'death' is no longer likely to be 'sudden'. You get the warm fuzzies from receivables, and possibly funding, floating you for months at a time. You can keep the edge, but lose the sweat.
If you're a risk-taker in your corporate life, you could possibly be primed to be an entrepreneur too. Just remember that grabbing your tabby's fluffy tail, risking scratched arms and snagged clothing, is nothing like doing the same with a tiger.
The spirit moves you.
Entrepreneur = passion. Can't stress that enough.
A couple of days ago I visited a startup (Sharpcast). On a Sunday afternoon. Got the grand tour. First off, a goodly number of folks were there working away. Very reassuringly startup-like. And I got to meet the Founder/CEO, Gibu Thomas. I expected a polite handshake, a 'nice-to-meet-you' and a wave before he went back to his laptop. But no, he bounced out of his office with a 'let me show you a demo', and proceeded to do just that.
He was excited, articulate and seemed to genuinely enjoy doing the demo. And I got an end-to-end show with background info, planned features, market potential, and Q&A - the works, and I wasn't an investor, analyst or influential tech blogger. (He doesn't know about this very-much-under-the-radar blog either.) The potential ROE (return on effort) was small - I was, at best, a possible customer for the product somewhere far down the line.
But Gibu behaved like a quintessential entrepreneur who's pumped every time he talks about his product, and looks for every opportunity to do just that. If it meant another half-hour at work on a weekend, that thought wouldn't even register in his drive to evangelize to yet another soul.
Last Sunday I met a poster-boy for the entrepreurial spirit. And the product's very cool too. I guess he's won another customer so the ROE wasn't quite zero.
A couple of days ago I visited a startup (Sharpcast). On a Sunday afternoon. Got the grand tour. First off, a goodly number of folks were there working away. Very reassuringly startup-like. And I got to meet the Founder/CEO, Gibu Thomas. I expected a polite handshake, a 'nice-to-meet-you' and a wave before he went back to his laptop. But no, he bounced out of his office with a 'let me show you a demo', and proceeded to do just that.
He was excited, articulate and seemed to genuinely enjoy doing the demo. And I got an end-to-end show with background info, planned features, market potential, and Q&A - the works, and I wasn't an investor, analyst or influential tech blogger. (He doesn't know about this very-much-under-the-radar blog either.) The potential ROE (return on effort) was small - I was, at best, a possible customer for the product somewhere far down the line.
But Gibu behaved like a quintessential entrepreneur who's pumped every time he talks about his product, and looks for every opportunity to do just that. If it meant another half-hour at work on a weekend, that thought wouldn't even register in his drive to evangelize to yet another soul.
Last Sunday I met a poster-boy for the entrepreurial spirit. And the product's very cool too. I guess he's won another customer so the ROE wasn't quite zero.
The call of the conference.
An early-stage entrepreneur conjures up the image of someone who's got no time for anything that doesn't further his/her business. Abs turn to pot bellies, hairstyles change to long and longer, beards become biblical, families are held together with tokens and promises, friends limited to birthday e-cards, and conversations about politics and what's hot on TV become impossible to sustain. So why should/would an entrepreneur attend conferences?
Attending conferences specific to your field or ones where you're likely to find customers are no-brainers. Attendance is a sales and marketing requirement. How about conferences for entrepreneurs? For a first-timer, or someone who's testing the waters, these conferences could be a great learning experience. They usually have tracks on the basic to-do's and you get to ask questions, or better yet, listen to someone else doing ditto, and you'd easily get your money's worth out of it. There's also the promise of networking, which delivers, but rarely as much as you'd expect (that's another post). Still, if you're new to startups, picking one or two of the more effective conferences (check out the speakers and panels first) is definitely worthwhile.
What about entrepreneurs who already know about stuff like incorporations and term sheets? Shouldn't they be out hustling for team members, customers, funding etc., instead of attending a conference? Well, I asked myself that question, but decided that I could clear up one day and go to one. And I did so for 'inspiration'. No, I didn't necessarily expect new ideas, I've already got mine, but it is kind of like going to a revivalist meeting - when you're in a gathering of the uber-faithful, everyone is so incredibly upbeat and excited about entrepreneurism that you can't help but absorb some of it.
Yes, you do have to pick and choose which keynote speaker is worth your while, and panel discussions may do little except give you a place to sit and catch up on email, but going to one does freshen your thinking. If nothing else it re-energizes and confirms your startup decision - a little caffeine for the entrepreneurial spirit. I've yet to meet someone at these conferences who wishes he/she stuck to a corporate job. And, as an added bonus, you're likely to run into old friends and maybe meet someone new who's fun too (just don't go expecting to find your CTO there).
So, if you hear the call of an entrepreneurs' conference, it's okay to give in once in a while. Notwithstanding the lukewarm coffee, the hard folding chairs, the dry chicken and the soggy salad, there could be dynamic speakers and fascinating stories too - a nice little pick-me-up for the hard-working entrepreneur.
Attending conferences specific to your field or ones where you're likely to find customers are no-brainers. Attendance is a sales and marketing requirement. How about conferences for entrepreneurs? For a first-timer, or someone who's testing the waters, these conferences could be a great learning experience. They usually have tracks on the basic to-do's and you get to ask questions, or better yet, listen to someone else doing ditto, and you'd easily get your money's worth out of it. There's also the promise of networking, which delivers, but rarely as much as you'd expect (that's another post). Still, if you're new to startups, picking one or two of the more effective conferences (check out the speakers and panels first) is definitely worthwhile.
What about entrepreneurs who already know about stuff like incorporations and term sheets? Shouldn't they be out hustling for team members, customers, funding etc., instead of attending a conference? Well, I asked myself that question, but decided that I could clear up one day and go to one. And I did so for 'inspiration'. No, I didn't necessarily expect new ideas, I've already got mine, but it is kind of like going to a revivalist meeting - when you're in a gathering of the uber-faithful, everyone is so incredibly upbeat and excited about entrepreneurism that you can't help but absorb some of it.
Yes, you do have to pick and choose which keynote speaker is worth your while, and panel discussions may do little except give you a place to sit and catch up on email, but going to one does freshen your thinking. If nothing else it re-energizes and confirms your startup decision - a little caffeine for the entrepreneurial spirit. I've yet to meet someone at these conferences who wishes he/she stuck to a corporate job. And, as an added bonus, you're likely to run into old friends and maybe meet someone new who's fun too (just don't go expecting to find your CTO there).
So, if you hear the call of an entrepreneurs' conference, it's okay to give in once in a while. Notwithstanding the lukewarm coffee, the hard folding chairs, the dry chicken and the soggy salad, there could be dynamic speakers and fascinating stories too - a nice little pick-me-up for the hard-working entrepreneur.
TMI.
Every entrepreneur worries about giving away too much information about his hot idea until it is no longer an idea but a fait accompli. Here are just some of the one-liners (forget the 30-second pitch) I've heard recently about some ventures: "It's in networking, but hardware'; 'It's networking software'; 'It's a networking appliance'; 'It's social networking'; 'It's distributing networked content'. Impressive. These are clearly the result of much deliberation. Notice that there's enough information to know if the startup is about hardware/sofware or both, and they're all in some way involved with networking (which is only a mammoth market with myriad niches). But that's it. There's no hint of what it is the startup will actually do. Hey, I've even run across people who're starting consulting practices who clam up about the details (consult with high-tech manufacturers - now that narrows the field).
I understand the reluctance to say too much too soon to too many - I'm not crazy about broadcasting my own idea either (no, it is not in networking - or is it?). But how do you maintain a conversation without sounding like a delusional dweeb with a penchant for conspiracy theories? For example, how do you answer a specific followup like "what kind of content do you work with"? Do you sound vague and weak and in serious need of a shot of business savvy by saying "all kinds", or uptight and suspicious with "can't talk about it yet"?
In my opinion, the majority of people do not need to know much - maybe just that you're involved in a certain space, field, industry. So what if your one-liner is a conversation dampener - you can always segue to a story about your chihuahua if you have one. Your cousin's wedding or your high school reunion are not events where you should be pouring out your entrepreneurial dreams anyway. And avoid events like entrepreneurs' forums (especially if they're awash with VCs) unless you're ready to bare all - folks in these places are very good at dragging details out of you.
There are some people who you'd want to talk to in some depth though. Maybe you want their advice, or you're hoping to hire them, or maybe they could be a customer. There are some that you could do an NDA with (potential hires for example), but as one colleague asked, how do you enforce the NDA? I'm sure it can be done, and people have done it, but I'm hoping the NDA is evidence of seriousness, something that'll make the signer a little more cautious. But there are many folks I've talked to without an NDA - these tend to be super-experienced, business heavy weights who I treat as trustworthy because they've proven to be so. But even then, I don't give them all the details. As for customer prospects, they're most unlikely to sign an NDA, especially at an early stage. They're tricky to work with since if you think of them as a prospect most likely the potential competition will too, and few of them would be secretive about your ideas unless your rep's like Tony Soprano's. Best tactic with prospects is to let them do the talking and cover way more ground than you intend to focus on - it'll give you good background info and make them a little fuzzy about the specifics.
Reticence. Caution. Discretion. All dull-sounding traits, but that's what you'll have to practice for a while until your startup is solid. But some day, oh frabjous day!, when you've got actual customers, you'll be ready to flood the world with information (and/or marketing-speak) and limit your paranoia to intellectual property protection. And then you can retire those chihuahua-story diversionary tactics.
I understand the reluctance to say too much too soon to too many - I'm not crazy about broadcasting my own idea either (no, it is not in networking - or is it?). But how do you maintain a conversation without sounding like a delusional dweeb with a penchant for conspiracy theories? For example, how do you answer a specific followup like "what kind of content do you work with"? Do you sound vague and weak and in serious need of a shot of business savvy by saying "all kinds", or uptight and suspicious with "can't talk about it yet"?
In my opinion, the majority of people do not need to know much - maybe just that you're involved in a certain space, field, industry. So what if your one-liner is a conversation dampener - you can always segue to a story about your chihuahua if you have one. Your cousin's wedding or your high school reunion are not events where you should be pouring out your entrepreneurial dreams anyway. And avoid events like entrepreneurs' forums (especially if they're awash with VCs) unless you're ready to bare all - folks in these places are very good at dragging details out of you.
There are some people who you'd want to talk to in some depth though. Maybe you want their advice, or you're hoping to hire them, or maybe they could be a customer. There are some that you could do an NDA with (potential hires for example), but as one colleague asked, how do you enforce the NDA? I'm sure it can be done, and people have done it, but I'm hoping the NDA is evidence of seriousness, something that'll make the signer a little more cautious. But there are many folks I've talked to without an NDA - these tend to be super-experienced, business heavy weights who I treat as trustworthy because they've proven to be so. But even then, I don't give them all the details. As for customer prospects, they're most unlikely to sign an NDA, especially at an early stage. They're tricky to work with since if you think of them as a prospect most likely the potential competition will too, and few of them would be secretive about your ideas unless your rep's like Tony Soprano's. Best tactic with prospects is to let them do the talking and cover way more ground than you intend to focus on - it'll give you good background info and make them a little fuzzy about the specifics.
Reticence. Caution. Discretion. All dull-sounding traits, but that's what you'll have to practice for a while until your startup is solid. But some day, oh frabjous day!, when you've got actual customers, you'll be ready to flood the world with information (and/or marketing-speak) and limit your paranoia to intellectual property protection. And then you can retire those chihuahua-story diversionary tactics.
Moonlighting.
In the very early stages, when all you have is an idea, it clearly makes sense to keep your current job. After all, you need to vet the idea to make sure it is viable (does the world really need a on-demand joke explainer?). So, you continue to work, spend a month or so researching, maybe even draw up some numbers and it's all looking good. What next?
If you're already at the enviable stage of not having to work for a living, there's a blog on yacht-buying that you should be reading. But if you're like most others, you've got to make money to cover pesky essentials like food and clothing and car insurance, and of course, gas, and you can't just up and quit. You need an exit-and-launch strategy.
I've seen a couple of entrepreneurs who'd set a goal of how much they'd have stashed in the bank before they quit, and they stuck it out in their jobs until they got there. Their discipline is very commendable - it would be wrenching to be spending long hours working on something else when your startup is so tantalizingly close.
There's the approach of continuing to draw the paycheck until you've lined up alternate funds, i.e. investors. Sounds great in theory, but there are many requirements to be met before investors commit funds, unless you're a proven entrepreneur with past successes. For example, it really helps to have a customers lined up - which is challenging to achieve without funding or product (but not impossible). It could take a long while before the startup is ready for funding. And of course, in all these cases you have to worry about intellectual property rights for anything you may develop while in someone else's employ.
Plan C, or the hedging-your-bets approach is to keep working until the startup reaches some milestons leading to revenue or funding, but maybe in a reduced capacity. This way you have more time to spend on your dream, but there's some spare change in your pockets too ,as well as light at the end of the tunnel. Consulting seems to be an attractive choice for providing some income while moonlighting on building a startup. It has a lot going for it - flexibility, no long-term commitments, decent compensation. But the downside is that there's no guarantees, and what you thought was a cushy three-month gig may turn out to be a three-day budget vaporization and you may have to spend your 'free' time seeking new engagements instead of nurturing your startup.
Lacking other financial cushions, working on another job while laying the foundation for your startup is a sensible approach, but it does have its costs. It takes time and distracts you from your idea. And there could be the very real danger of slipping into a 'comfort zone coma' - you're making money, so you slow down. You have to work hard to keep the fire in the belly burning (lay off the antacids!) so you can devote yourself to your dream sooner instead of later. If you don't, it may never be anything but a dream.
If you're already at the enviable stage of not having to work for a living, there's a blog on yacht-buying that you should be reading. But if you're like most others, you've got to make money to cover pesky essentials like food and clothing and car insurance, and of course, gas, and you can't just up and quit. You need an exit-and-launch strategy.
I've seen a couple of entrepreneurs who'd set a goal of how much they'd have stashed in the bank before they quit, and they stuck it out in their jobs until they got there. Their discipline is very commendable - it would be wrenching to be spending long hours working on something else when your startup is so tantalizingly close.
There's the approach of continuing to draw the paycheck until you've lined up alternate funds, i.e. investors. Sounds great in theory, but there are many requirements to be met before investors commit funds, unless you're a proven entrepreneur with past successes. For example, it really helps to have a customers lined up - which is challenging to achieve without funding or product (but not impossible). It could take a long while before the startup is ready for funding. And of course, in all these cases you have to worry about intellectual property rights for anything you may develop while in someone else's employ.
Plan C, or the hedging-your-bets approach is to keep working until the startup reaches some milestons leading to revenue or funding, but maybe in a reduced capacity. This way you have more time to spend on your dream, but there's some spare change in your pockets too ,as well as light at the end of the tunnel. Consulting seems to be an attractive choice for providing some income while moonlighting on building a startup. It has a lot going for it - flexibility, no long-term commitments, decent compensation. But the downside is that there's no guarantees, and what you thought was a cushy three-month gig may turn out to be a three-day budget vaporization and you may have to spend your 'free' time seeking new engagements instead of nurturing your startup.
Lacking other financial cushions, working on another job while laying the foundation for your startup is a sensible approach, but it does have its costs. It takes time and distracts you from your idea. And there could be the very real danger of slipping into a 'comfort zone coma' - you're making money, so you slow down. You have to work hard to keep the fire in the belly burning (lay off the antacids!) so you can devote yourself to your dream sooner instead of later. If you don't, it may never be anything but a dream.
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