Yes, it happens to startups too, whether they have three or thirty employees. Unless your business has a special focus on the month of December a la Amazon for example, you too will be infected.
Top signs you're under the influence of the season:
- 'Out of office' is your #1 sender
- All the investors you're trying to meet are in the mountains or the islands
- Gingerbread lattes are the beverage of choice in your coffee house meetings
- You're seeing red or green, or, yikes, both, everywhere
- Your conference calls meander into a discussion on which alcoholic beverage is the gift of choice
- Your parents are visiting
- You are visiting your parents
- You're up late working because you've been partying earlier
- You're up even later because your work stinks as you've been partying earlier
- You just give up and sleep in as you know no one else will wake up early to care anyway
Startups are not immune to the effects of the season, so if you can slack off a teeny bit, give in to the spirit. It's good for the morale and all that of course, but most importantly, it is fun.
Cheers!
The downside
There's been a lot of blogtalk about a couple of startups that have recently pulled the plug on their failing ventures, some after many millions of dollars of spending and years of effort. There are two that I found interesting because they contemplated the possibility of failure and how it could become reality - the downside of startups.
The first was about the recent closure of Edgeio and what appears to the similar fate facing Podtech. Both companies had high profile guys - the kind that were sought after to opine about tech trends at big-ticket conferences - at the helm, both raised decent VC funds, but that didn't guarantee success. According to the blogger (here's the post) it all boils down to too much hype and too little focus on the business.
The second one is by a founder of the company that shutdown, Zingdom. His post details how the company went through 5 years and three rounds of funding, built a product with a supportive customer base and still couldn't stay in business. It is extremely interesting to see how things can appear to be moving forward on the surface while unraveling below. A most cautionary tale. The lessons learned span everything from development methodology to keeping up with the Valley happenings, but one of particular note is that 'having too much money' can be dangerous.
Focus on the customer/user. It's a very simple and powerful mantra whether you're opening a Cali-French bistro or creating a website for folks hot-footing it to global-warming travel sites. But however well-intentioned you are, and even if you think that's exactly what you're doing, it is easy to get your sights blurry. For instance, our team made a technology decision in the interests of getting the product out to the user quickly. User-focused right? Maybe, but not comprehensively so, as they missed the requirement that users would want adds and changes and the tools used should easily support that - which unfortunately the bleeding-edge choice wouldn't be able to without much bandaiding. Lucky for us we saw this before we got too far, and it has made us hyper-aware about double-checking our decision-making at all levels. And it makes us more sympathetic and less know-it-all-y. The companies mentioned above didn't seek to fail and they had sharp people leading them. And yet they strayed off the path, stumbled and couldn't get up. And as conjectured in the blogs, it could be that all the money they got muffled the 'stay on target' message in their ear. Money - too much can deliver too little.
The first was about the recent closure of Edgeio and what appears to the similar fate facing Podtech. Both companies had high profile guys - the kind that were sought after to opine about tech trends at big-ticket conferences - at the helm, both raised decent VC funds, but that didn't guarantee success. According to the blogger (here's the post) it all boils down to too much hype and too little focus on the business.
The second one is by a founder of the company that shutdown, Zingdom. His post details how the company went through 5 years and three rounds of funding, built a product with a supportive customer base and still couldn't stay in business. It is extremely interesting to see how things can appear to be moving forward on the surface while unraveling below. A most cautionary tale. The lessons learned span everything from development methodology to keeping up with the Valley happenings, but one of particular note is that 'having too much money' can be dangerous.
Focus on the customer/user. It's a very simple and powerful mantra whether you're opening a Cali-French bistro or creating a website for folks hot-footing it to global-warming travel sites. But however well-intentioned you are, and even if you think that's exactly what you're doing, it is easy to get your sights blurry. For instance, our team made a technology decision in the interests of getting the product out to the user quickly. User-focused right? Maybe, but not comprehensively so, as they missed the requirement that users would want adds and changes and the tools used should easily support that - which unfortunately the bleeding-edge choice wouldn't be able to without much bandaiding. Lucky for us we saw this before we got too far, and it has made us hyper-aware about double-checking our decision-making at all levels. And it makes us more sympathetic and less know-it-all-y. The companies mentioned above didn't seek to fail and they had sharp people leading them. And yet they strayed off the path, stumbled and couldn't get up. And as conjectured in the blogs, it could be that all the money they got muffled the 'stay on target' message in their ear. Money - too much can deliver too little.
All about the 'tude
Attitude. That's what gets things done. Yes, it is a staple of every inspirational speaker or motivational totchke shelves, but there's a reason for it - some people need reminding.
In a previous post, I've opined on the startup balance between resources, timeline and deliverables and the constant challenge it raises, especially in the early stages when your dreams and deliverables overpower your resources. And I held forth on how to make those compromises. But, as I'm now involved in an almost daily balance reset, I've realized that there's one important component that determines how successful you're going to be, and that is Attitude (a big 'A' in a good way).
For many of us, especially those who tend to let the left brain be big boss (the right does little more than visualize pin stripes, cigar and some power girth), we tend to get all analytical about it. That goes double for the techies. Don't get me wrong. I'm not advocating an emo-meltdown, channeling fear, despair or anger. But you need to shake up the can-do attitude and pass it round for a good whiff before you get into the fray.
For instance. We have another user trial coming up. We have a list of must-have features. What we don't have is enough engineer-time to get those taken care of - in the 'normal' manner. And our framework makes it counter-productive to try to get contract help, at least in this time frame. Yes, there are constraints. But, as I heard Marissa Mayer of Google so succinctly put it in one of her talks: creativity likes constraints. It is so much more effective to address your problems with the attitude of 'Whoo! An opportunity to show how I can make things happen!' instead of '*&!# this is going to blow up'. It's not being new-agey to say the way you feel impacts the way you think which affects the outcome.
Build the attitude, build the startup (and be a hero?). This is one of those things that should go into your culture. Leadership by example is required of course, but it may need a little more nurturing. A workshop if you can spring for it. Or maybe those totchkes?
In a previous post, I've opined on the startup balance between resources, timeline and deliverables and the constant challenge it raises, especially in the early stages when your dreams and deliverables overpower your resources. And I held forth on how to make those compromises. But, as I'm now involved in an almost daily balance reset, I've realized that there's one important component that determines how successful you're going to be, and that is Attitude (a big 'A' in a good way).
For many of us, especially those who tend to let the left brain be big boss (the right does little more than visualize pin stripes, cigar and some power girth), we tend to get all analytical about it. That goes double for the techies. Don't get me wrong. I'm not advocating an emo-meltdown, channeling fear, despair or anger. But you need to shake up the can-do attitude and pass it round for a good whiff before you get into the fray.
For instance. We have another user trial coming up. We have a list of must-have features. What we don't have is enough engineer-time to get those taken care of - in the 'normal' manner. And our framework makes it counter-productive to try to get contract help, at least in this time frame. Yes, there are constraints. But, as I heard Marissa Mayer of Google so succinctly put it in one of her talks: creativity likes constraints. It is so much more effective to address your problems with the attitude of 'Whoo! An opportunity to show how I can make things happen!' instead of '*&!# this is going to blow up'. It's not being new-agey to say the way you feel impacts the way you think which affects the outcome.
Build the attitude, build the startup (and be a hero?). This is one of those things that should go into your culture. Leadership by example is required of course, but it may need a little more nurturing. A workshop if you can spring for it. Or maybe those totchkes?
The fun part
We recently took the alpha version, just as soon as we thought it had passed our testing, to a bunch of users, real ones, the ones who we're building this for. First off, as an early stage startup, we don't have the luxury of dedicated testers. All team members, full-time, part-time, hey-I-just-like-you-guys-and-I'll-help, all pitch in to 'check' it out. We don't have a plan for our testing yet - just a schedule. So we knew when we took it to the users that they'd be seeing it quirks and all, but we thought it would be worth it, as they'd be doing a real test and, most importantly, we'd find out very quickly if this product had value.
It was the most fun I've had in a long time. Of course there were the minor stumbles and mis-reads and consequently lots of input on what should be fixed/improved. But, the users seemed to genuinely enjoy testing the product and we had to ask them to stop and talk to us about their experiences instead. It is a huge rush to create something and find that people like it and think it useful. Of course, there was the predictable dour voice of prudence in the background cautioning us to not read too much into this as it was only a small sample set after all, but one has to live in the moment. This is one of the great highs of entrepreneurship, and it was worth wallowing in - at least for a little while, as there are all those fixes to take care of before doing it all over again.
It was the most fun I've had in a long time. Of course there were the minor stumbles and mis-reads and consequently lots of input on what should be fixed/improved. But, the users seemed to genuinely enjoy testing the product and we had to ask them to stop and talk to us about their experiences instead. It is a huge rush to create something and find that people like it and think it useful. Of course, there was the predictable dour voice of prudence in the background cautioning us to not read too much into this as it was only a small sample set after all, but one has to live in the moment. This is one of the great highs of entrepreneurship, and it was worth wallowing in - at least for a little while, as there are all those fixes to take care of before doing it all over again.
A double-edged sword
The previous post covered the challenge of balancing scope and deadlines with the minimal resources that startups are able to scare up. The startup team uses any tool it can to do more in less time - and email, of course, is one that's pretty much taken for granted. There's no denying, it is a great productivity tool inspite of hyped stories on 'email-free' Fridays. Email is timely, quickly distributed, avoids the black holes of side conversations when you're hustling to get things done, and best of all, documents stuff that you need to refer to.
All good, as long as you know when you shouldn't use it. And this is where it gets tricky. You've been sending and receiving dozens of emails a day, covering everything from missing features, funding futures, unmissable meetings and un-spinnable bugs. Somewhere along the way, up pops an issue (and this is almost guaranteed to happen when you're in a crunch) - someone did or didn't do something and someone else gets huffy and sends an email about it (not you, as of course, you know better, don't you?). And your first reaction is to dash off a reply on all the ways this is not right - but writing this email would be on top of the list. A big email no-no: don't criticize on email, unless you want to document it for HR purposes (read, adding to the 'reasons for firing' file). This doesn't mean you can't offer feedback on work deliverables, but stuff like behavior, attitude, playing well or not with others, all of those are better broached in person first.
But, it is not easy to remember and it is almost instinctive to hit the reply button when you read something inflammatory. Which is why you have to become a big fan of the 'draft'. You have to get into the habit of never sending anything that could be an 'oops!' or a 'maybe I shouldn't have' immediately. Write it if you want to - sometimes it clarifies your thinking to see it in words - but save it. Pick up the phone or walk down the hallway and talk it over - you'd be surprised at how often the whole thing ends up just being a misunderstanding or an over reaction due to pressure. If it has to be by email (though that should be very rare), give it some time to settle before you review your response and see if it's fit for sending. Having done email about 'issues' in IM-like frequency in the past - and discovered how it could escalate the smallest slip while being totally useless in actually resolving anything - I've become much more circumspect about what I send by email. Still, I do get tempted at times into shooting off a hot reply, and credit the trusty draft for saving me from the sinking into a dismal morass of email ping-pong.
Bottom line, email is great at cutting down the time it takes to communicate what we need to get stuff done, but shouldn't be used to discuss anything, especially if there's the possibility of value judgments and emotional positioning. Then, all you do is snick some thin skins and foment drama that is most distracting to a startup.
All good, as long as you know when you shouldn't use it. And this is where it gets tricky. You've been sending and receiving dozens of emails a day, covering everything from missing features, funding futures, unmissable meetings and un-spinnable bugs. Somewhere along the way, up pops an issue (and this is almost guaranteed to happen when you're in a crunch) - someone did or didn't do something and someone else gets huffy and sends an email about it (not you, as of course, you know better, don't you?). And your first reaction is to dash off a reply on all the ways this is not right - but writing this email would be on top of the list. A big email no-no: don't criticize on email, unless you want to document it for HR purposes (read, adding to the 'reasons for firing' file). This doesn't mean you can't offer feedback on work deliverables, but stuff like behavior, attitude, playing well or not with others, all of those are better broached in person first.
But, it is not easy to remember and it is almost instinctive to hit the reply button when you read something inflammatory. Which is why you have to become a big fan of the 'draft'. You have to get into the habit of never sending anything that could be an 'oops!' or a 'maybe I shouldn't have' immediately. Write it if you want to - sometimes it clarifies your thinking to see it in words - but save it. Pick up the phone or walk down the hallway and talk it over - you'd be surprised at how often the whole thing ends up just being a misunderstanding or an over reaction due to pressure. If it has to be by email (though that should be very rare), give it some time to settle before you review your response and see if it's fit for sending. Having done email about 'issues' in IM-like frequency in the past - and discovered how it could escalate the smallest slip while being totally useless in actually resolving anything - I've become much more circumspect about what I send by email. Still, I do get tempted at times into shooting off a hot reply, and credit the trusty draft for saving me from the sinking into a dismal morass of email ping-pong.
Bottom line, email is great at cutting down the time it takes to communicate what we need to get stuff done, but shouldn't be used to discuss anything, especially if there's the possibility of value judgments and emotional positioning. Then, all you do is snick some thin skins and foment drama that is most distracting to a startup.
More, or less
One of my managers from many years ago was very fond of the word 'interlock' - especially in the context of 'achieving interlock' between marketing and development or sales and engineering. His was a world of departments of a few hundred people each and budgets in mega-millions, but I believe it is a big challenge in an early stage startup too.
We're all intimately familiar with the balancing act between time, resources and scope, delivering a wobbly visual regardless of which metaphor you choose. Scrunch it down to the startup when all you have are minimal resources who most likely are on a steep learning curve (in a startup it's hard to totally avoid the bleeding edge) while trying to deliver the prototype or beta or whatever, and do it so the customer/user will be blown away - which means an ever-increasing scope of course. And you need it to have happened yesterday so you can get the traction and funding you need to get out of the bind you're in (or so you think).
This makes for some exquisite tension in the team. Yes, you're all passionate and all committed to delivering a quality product that'll take the world (or the little piece you're going after) by storm, but time's a-slipping even when the team's putting in 18-hour days, so what's an entrepreneur to do?
I believe now's when you need your values and focus, the stuff you can measure your decisions and actions by, and makes it easier for your team to accept.
We're all intimately familiar with the balancing act between time, resources and scope, delivering a wobbly visual regardless of which metaphor you choose. Scrunch it down to the startup when all you have are minimal resources who most likely are on a steep learning curve (in a startup it's hard to totally avoid the bleeding edge) while trying to deliver the prototype or beta or whatever, and do it so the customer/user will be blown away - which means an ever-increasing scope of course. And you need it to have happened yesterday so you can get the traction and funding you need to get out of the bind you're in (or so you think).
This makes for some exquisite tension in the team. Yes, you're all passionate and all committed to delivering a quality product that'll take the world (or the little piece you're going after) by storm, but time's a-slipping even when the team's putting in 18-hour days, so what's an entrepreneur to do?
I believe now's when you need your values and focus, the stuff you can measure your decisions and actions by, and makes it easier for your team to accept.
- Customer focus. This is why you don't settle just for what's technically faster or easier to deliver, but what will really make a difference to the customer. It's why you should weigh every option and reject it if it would take away from the user experience.
- Excellence and integrity. The reason you don't want to put out a shoddy piece of work, even if it is only a prototype.
- People focus. It's one thing for everyone to work hard because they want to make a deadline, but there are times when you may have to move the deadline because working long hours continuously only burns people out (and also diminishes quality and productivity).
- Staying hungry. If you, like Steve Jobs, believe hunger keeps you sharp, you don't want to go too soft on either your deadlines or you deliverables. And for many startups, hunger is real - they need to make their deliverables, and do it fast, in order to get funding which will help them eat (OK, so no one's starving, but maybe the team hopes to dine on something better than a large 1 topping pizza - $3 off with coupon). You need to be zipping along, not coasting.
Doubt, caution
First off, I admit to having my post titles influenced by catchy movie ones ;)
It's pretty much established that an entrepreneur has to be passionately committed to his/her idea, and believe in it - s/he needs to be a bouncing poster child for optimism. This kind of gung-ho dedication is a must-have to lead the troops and stick it through the ups and downs (the many downs) of a startup. All the entrepreneur self-help books will tell you so.
But, there are times, usually in the wee hours of the morning, when a person may be visited by the dreaded 'doubt'. What if I never get funding? What if my idea turns out to be a stinker? What if I don't have what it takes to get this done? Conventional wisdom says you shouldn't be thinking such things, but isn't that just sticking your head in the sand and refusing to face reality?
Conventional wisdom is spot on in this case. An entrepreneur has no use for doubt, but can benefit from a healthy dose of caution. 'What if I don't get funding?' is better replaced by 'What are my options for boot-strapping?'. 'I should develop a plan to validate and refine the concept' is a much more useful approach than dire imaginings of your idea flopping like a goldfish fallen on the floor. Figuring what's required to get the job done and who can complement your skills is vastly more productive than wallowing in despair over your perceived shortcomings, be it lack of experience or a lack of a high net worth network.
The entrepreneur has to be both an optimist and a pragmatist, but also swiftly squelch any signs of doubt. Let others audition for the role of doubting Thomas, they don't have much to lose.
It's pretty much established that an entrepreneur has to be passionately committed to his/her idea, and believe in it - s/he needs to be a bouncing poster child for optimism. This kind of gung-ho dedication is a must-have to lead the troops and stick it through the ups and downs (the many downs) of a startup. All the entrepreneur self-help books will tell you so.
But, there are times, usually in the wee hours of the morning, when a person may be visited by the dreaded 'doubt'. What if I never get funding? What if my idea turns out to be a stinker? What if I don't have what it takes to get this done? Conventional wisdom says you shouldn't be thinking such things, but isn't that just sticking your head in the sand and refusing to face reality?
Conventional wisdom is spot on in this case. An entrepreneur has no use for doubt, but can benefit from a healthy dose of caution. 'What if I don't get funding?' is better replaced by 'What are my options for boot-strapping?'. 'I should develop a plan to validate and refine the concept' is a much more useful approach than dire imaginings of your idea flopping like a goldfish fallen on the floor. Figuring what's required to get the job done and who can complement your skills is vastly more productive than wallowing in despair over your perceived shortcomings, be it lack of experience or a lack of a high net worth network.
The entrepreneur has to be both an optimist and a pragmatist, but also swiftly squelch any signs of doubt. Let others audition for the role of doubting Thomas, they don't have much to lose.
A Gandhian entrepreneur?
October 2nd was Gandhi's birthday - the Gandhi, the Mahatma, not the thousands with the same name. It's a holiday in India, and with globalization and flat-earthing one has to pay attention to when people work or don't. It got me thinking though. Gandhi's the icon for the ages when it comes to non-violence, but he's also expounded his philosophy on a wide variety of subjects. Is there a Gandhian way to entrepreneurship?
This doesn't aim to be a scholarly treatise on the subject and I didn't research Gandhi's life story or teachings. I know the highlights of course, and also know Gandhi was a big proponent of 'cottage industries' - the stuff that the rural poor can do on their own to make a living, with minimal capital investment. The spinning wheel was his icon - he would have got a kick out of the fact that organic, hand-spun and hand-woven clothing is a luxury item now. If Gandhi were around now he'd have plenty of burning causes to keep him busy and it's most unlikely he'd be off starting a company, but he'd probably have some good words for the clean energy and sustainability efforts, or anything that fights hunger and poverty.
So, no, Gandhi is not likely to be a startup guy, but is there anything in his philosophy that an entrepreneur may find worthwhile? Let's start with the first of the two most-popular Gandhian quotes (a mixed blessing when they're on mugs and New Age rocks): Happiness is when what you think, what you say and what you do are in harmony. Nice one to live by - most of the time. For example, if you customer satisfaction is your #1 goal, sure, go ahead and paste it on a poster - but having your team solicit and pay attention to user feedback will build value and morale (knowing your work is in alignment with company goals is pretty satisfying). But few entrepreneurs are in the position to call all the shots in a startup - there are too many constraints, too much to be proven and too many players and stakeholders. There will be times when you may not want to say what you think and you should definitely not act on it. You may just want to slam down your laptop and scream "what a %&*! moronic idea" at your investor who asks you to make a 180 degree shift in your business model just when there's an uptick. This is why you're thankful the weekend stress management class you took 6 months ago kicks in and you're mentally chanting "he gave us $2 million, he gave us $2 million" while you deflect with "hmm, interesting idea, we'll go run the numbers on it, but let me show you our latest release". It definitely is not the time to say what you think, even if you deleted the %&*! expletives. This Gandhism is great for the big things, like principles, but most entrepreneurs would be happy to just be able to hold on to discretion and a semblance of calmness in the daily challenges of startup life.
Another over-used but undoubtedly cool quote is: Be the change you want to see in the world. This is not just a variation on the previous theme. It's a call to lead by example. If integrity is on your list of company values, be careful who you accept funding from. If you've always believed that companies could be run better, here's your chance - take time to make it happen, don't let it get lost in the startup chaos. If you're concerned about global warming, be serious about telecommuting options and don't keep putting it off for 'when we're bigger'. If 'doing good' is important, do it, and support your employees when they want to do it. I believe this is a Gandhism an entrepreneur could hold on to (got the inspirational mug?).
This doesn't aim to be a scholarly treatise on the subject and I didn't research Gandhi's life story or teachings. I know the highlights of course, and also know Gandhi was a big proponent of 'cottage industries' - the stuff that the rural poor can do on their own to make a living, with minimal capital investment. The spinning wheel was his icon - he would have got a kick out of the fact that organic, hand-spun and hand-woven clothing is a luxury item now. If Gandhi were around now he'd have plenty of burning causes to keep him busy and it's most unlikely he'd be off starting a company, but he'd probably have some good words for the clean energy and sustainability efforts, or anything that fights hunger and poverty.
So, no, Gandhi is not likely to be a startup guy, but is there anything in his philosophy that an entrepreneur may find worthwhile? Let's start with the first of the two most-popular Gandhian quotes (a mixed blessing when they're on mugs and New Age rocks): Happiness is when what you think, what you say and what you do are in harmony. Nice one to live by - most of the time. For example, if you customer satisfaction is your #1 goal, sure, go ahead and paste it on a poster - but having your team solicit and pay attention to user feedback will build value and morale (knowing your work is in alignment with company goals is pretty satisfying). But few entrepreneurs are in the position to call all the shots in a startup - there are too many constraints, too much to be proven and too many players and stakeholders. There will be times when you may not want to say what you think and you should definitely not act on it. You may just want to slam down your laptop and scream "what a %&*! moronic idea" at your investor who asks you to make a 180 degree shift in your business model just when there's an uptick. This is why you're thankful the weekend stress management class you took 6 months ago kicks in and you're mentally chanting "he gave us $2 million, he gave us $2 million" while you deflect with "hmm, interesting idea, we'll go run the numbers on it, but let me show you our latest release". It definitely is not the time to say what you think, even if you deleted the %&*! expletives. This Gandhism is great for the big things, like principles, but most entrepreneurs would be happy to just be able to hold on to discretion and a semblance of calmness in the daily challenges of startup life.
Another over-used but undoubtedly cool quote is: Be the change you want to see in the world. This is not just a variation on the previous theme. It's a call to lead by example. If integrity is on your list of company values, be careful who you accept funding from. If you've always believed that companies could be run better, here's your chance - take time to make it happen, don't let it get lost in the startup chaos. If you're concerned about global warming, be serious about telecommuting options and don't keep putting it off for 'when we're bigger'. If 'doing good' is important, do it, and support your employees when they want to do it. I believe this is a Gandhism an entrepreneur could hold on to (got the inspirational mug?).
Entrepreneurial Blogs
Wow! Someone not only reads all the entrepreneurial blogs out there, but they've ranked and posted a list of '100 Daily Must-Reads for Entrepreneurs'. I didn't know that this blog is on the list until someone googling me found it. I'm hugely thrilled. I started this blog as a way to capture my thoughts on the human aspect of entrepreneurship and share with whoever might find it useful - and have done very little to market it. So I'm not only amazed that it was found, but that it was found worthy of a 'must-read'. It's awesome that it reinforces the 'connect' part of why I do anything - including writing this blog.
The blogs listed are definitely worth looking into - there's something for everyone, especially if you're looking for 'how-to' ideas. There's never a better time to be an entrepreneur - the Internet's awash with mentors, guides, seers and sages and ignorance is no longer a plausible excuse.
By the way, I was corresponding with a Stanford student who's currently traveling in China, and he mentioned that this blog is blocked there. I'm guessing there was some kind of mistake, because honestly, unless you're suspicious of entrepreneurship in general, there's absolutely nothing objectionable in this blog - it's the online equivalent of vanilla custard, served just slightly chilled. A bizarre little side note - wonder if it adds some edgy cachet?
Lastly, this blog is not an easy thing to write, not just because I'm very busy and my mindshare is otherwise spoken for, but because it's sometimes hard to pick which of the dozen ideas deserves a post. So dear reader, you're here because you're interested in entrepreneurship of some sort or the other - most likely, you'll be blogging about your venture some day - so feel free to post a comment on what you'd like to read about. This is the one thing you can do as an entrepreneur with absolutely no risk whatsoever.
The blogs listed are definitely worth looking into - there's something for everyone, especially if you're looking for 'how-to' ideas. There's never a better time to be an entrepreneur - the Internet's awash with mentors, guides, seers and sages and ignorance is no longer a plausible excuse.
By the way, I was corresponding with a Stanford student who's currently traveling in China, and he mentioned that this blog is blocked there. I'm guessing there was some kind of mistake, because honestly, unless you're suspicious of entrepreneurship in general, there's absolutely nothing objectionable in this blog - it's the online equivalent of vanilla custard, served just slightly chilled. A bizarre little side note - wonder if it adds some edgy cachet?
Lastly, this blog is not an easy thing to write, not just because I'm very busy and my mindshare is otherwise spoken for, but because it's sometimes hard to pick which of the dozen ideas deserves a post. So dear reader, you're here because you're interested in entrepreneurship of some sort or the other - most likely, you'll be blogging about your venture some day - so feel free to post a comment on what you'd like to read about. This is the one thing you can do as an entrepreneur with absolutely no risk whatsoever.
A surfeit of opinions
Everyone has an opinion. On everything. But that's kind of what you're betting on when you go out gathering 'input', asking for 'feedback', 'guidance' or 'advice' from the 3 Fs (in this case, family, friends and their friends - subbing for the 'fools' that traditionally play the third F). You're hoping that taking your idea or pitch to them will give you access to their knowledge, experience, smarts and plain good sense so you can vet it for free.
And you find you get a lot of opinions. You may be asked to 'wag the long tail' or 'take a page out of Facebook'. S/he may direct you to add more detail to your pitch, change your pricing model, go for more or less money, seek out VCs or pray for angels. Of course, seeking opinions is not just for startup entrepreneurs. A student could be asking for help on essay for college apps, an exec considering a career change, a book idea, whatever. And they're all just as likely to receive opinions that cover the gamut from minor tweaks to major re-dos.
So, now you have all these opinions, what do you do with them? Which ones do you take to heart? There are a few things that you can do to help handle this over-abundance of input.
And you find you get a lot of opinions. You may be asked to 'wag the long tail' or 'take a page out of Facebook'. S/he may direct you to add more detail to your pitch, change your pricing model, go for more or less money, seek out VCs or pray for angels. Of course, seeking opinions is not just for startup entrepreneurs. A student could be asking for help on essay for college apps, an exec considering a career change, a book idea, whatever. And they're all just as likely to receive opinions that cover the gamut from minor tweaks to major re-dos.
So, now you have all these opinions, what do you do with them? Which ones do you take to heart? There are a few things that you can do to help handle this over-abundance of input.
- Listen. Obviously whoever you share your plans and ideas with is someone who you think will have something worthwhile to say. So, once you're done showing the presentation, explaining your idea, sharing your essay or novel outline, stop talking and start listening. Ask questions to get the ball rolling if you have to (have they seen anything like this before?) but make sure you get what you want - their unfiltered opinion.
- Give them credit. If your advisors suggest stuff you've already thought of, it is OK to keep that to yourself and show your appreciation. Having them involved in your idea is a good thing.
- Do explain. If there appears to be some misunderstanding about your offering, that in itself is good feedback - it shows that you need to refine it so there's no chance of confusion. To repeat, if you choose to ask someone for advice, you obviously think they're smart enough to get it, and if they didn't, it implies that something got lost in the presentation.
- Do not defend. If your advisor thinks your market strategy is nothing more than a shot at lucid dreaming, ask him why. If you have some more information to share that may change his thinking, go ahead and share it. Otherwise, there is little benefit to arguing a point. Assuming he understands what your proposing correctly, maybe he has a valid point. You're better off with a 'Good point. I'll think about it'.
- Keep notes. I'm personally inclined to look at people when I talk to them and when they talk to me, so I keep key points in my head during the meeting, but I do write them down later. These are helpful even months later, because a lot of the feedback is often predictions for the future.
- Assess before you act. One person may ask for another slide describing your technology while another thinks you have too many already. Sometimes feedback may be on something more strategic - your funding sources for example. Before you jump to changing your PowerPoint after each meeting, think about who said it and why and how it fits in with your vision. Don't make changes that don't sit well with you.
- Keep an open mind. We all get defensive, protective and just plain huffy if someone doesn't see our idea as great as think it is. Entirely understandable. But there's something to be said for seeking some level of detachment and assessing the input dispassionately. The people who're giving you the input are not dimwits (see a pattern here?), so taking their feedback seriously and thinking through it can't help but improve your idea. If nothing else, it will help you strengthen your story as you'll know how to respond to naysayers.
Exit Strategy
IPO. M&A. Sure, that's what on the exit strategy slide in your PowerPoint. But, I believe (and this has been reinforced by experience - mine and others), the founder/entrepreneur needs one too and it has to be figured out before taking the plunge to do the startup.
Recently I was chatting over lunch with a fellow entrepreneur whose startup is on its third year (that's another thing that every entrepreneur should have - a non-competing friend or two to share startup travails with). Their product's got customers and revenue, but, the seed money has run out and the revenue is not big enough yet to cover payroll fully, though it covers operations. They're busy trying to keep the company running while knocking on doors for funding, but unfortunately, they've not met with success. (IMHO, it's because they can't get investors dreaming of $100 Mill in 5 years, but seriously, so few startups actually reach that somewhat arbitrary goal.) The founder CEO is beginning to sport a furrowed brow - lack of income doesn't make for a fun or sustainable lifestyle for most of us - but is still passionate and dedicated and would hate to give up on the company.
That's when I suggested that she needs an exit strategy, and when she started talking about selling, I cut in with 'an exit strategy for you'. The funny thing is that everyone goes in assuming they have one. It's always I'll go back to the corporate world, or sell the IP if my company doesn't make it in two years. But the problem is that 'doesn't make it' is not always a clear-cut condition. You could be running on fumes, stuck for months in a due diligence delusion where the term sheet is always a week away. You could have customers sign MOUs but not convert into POs because their waiting for an internal reorg to be completed, but the dust never seems to settle. Or you've got customers and revenue enough to get by and you know you'd take off if you could just spend a tad bit more on marketing - except you dont' have that tad. So you hang in there, and continue hanging, drifting wearily as the weeks go by.
That's why you need something very specific which triggers the exit. Something like ' if I haven't had a paycheck or made more than $X in a year or 15 months (or whatever your personal threshold is)'. Or, maybe you don't want to be on a slow train and will not stick around if the company's growth is feeble. Once you've got your trigger figured out, then you can figure out what you will do - sell, shut down, walk away and let the co-founder run it, put it on ice for reviving when the market's better, whatever. Actually, an exit strategy is good if you're a startup employee too - how long would you be willing to work for reduced pay. Or you could be making a decent salary but feel the company, or your own prospects, are stuck in neutral or slipping into reverse.
This is worth writing down and saving for reading when things are not going well. It may remind you of your plans to step away - or convince you things are not quite as bad yet. Either way it will clarify your thinking, and get you going which is a good thing - startup limbo is a depressing place to be in for long.
One more thing: for an entrepreneur, planning to recognize failure and how to exit (notice 'exit', not 'handle') in that case is just about the hardest thing to do, especially when you're bursting with enthusiasm for the great idea that you're just launching. But, it's worse if you try to do it after the fact, since as an entrepreneur, you're hard-wired to believe in success. The trick is to consider it part of the business plan, your personal one, that you should build before you do the one for your startup. Then you'll be all set to look before, and after, you leap.
Recently I was chatting over lunch with a fellow entrepreneur whose startup is on its third year (that's another thing that every entrepreneur should have - a non-competing friend or two to share startup travails with). Their product's got customers and revenue, but, the seed money has run out and the revenue is not big enough yet to cover payroll fully, though it covers operations. They're busy trying to keep the company running while knocking on doors for funding, but unfortunately, they've not met with success. (IMHO, it's because they can't get investors dreaming of $100 Mill in 5 years, but seriously, so few startups actually reach that somewhat arbitrary goal.) The founder CEO is beginning to sport a furrowed brow - lack of income doesn't make for a fun or sustainable lifestyle for most of us - but is still passionate and dedicated and would hate to give up on the company.
That's when I suggested that she needs an exit strategy, and when she started talking about selling, I cut in with 'an exit strategy for you'. The funny thing is that everyone goes in assuming they have one. It's always I'll go back to the corporate world, or sell the IP if my company doesn't make it in two years. But the problem is that 'doesn't make it' is not always a clear-cut condition. You could be running on fumes, stuck for months in a due diligence delusion where the term sheet is always a week away. You could have customers sign MOUs but not convert into POs because their waiting for an internal reorg to be completed, but the dust never seems to settle. Or you've got customers and revenue enough to get by and you know you'd take off if you could just spend a tad bit more on marketing - except you dont' have that tad. So you hang in there, and continue hanging, drifting wearily as the weeks go by.
That's why you need something very specific which triggers the exit. Something like ' if I haven't had a paycheck or made more than $X in a year or 15 months (or whatever your personal threshold is)'. Or, maybe you don't want to be on a slow train and will not stick around if the company's growth is feeble. Once you've got your trigger figured out, then you can figure out what you will do - sell, shut down, walk away and let the co-founder run it, put it on ice for reviving when the market's better, whatever. Actually, an exit strategy is good if you're a startup employee too - how long would you be willing to work for reduced pay. Or you could be making a decent salary but feel the company, or your own prospects, are stuck in neutral or slipping into reverse.
This is worth writing down and saving for reading when things are not going well. It may remind you of your plans to step away - or convince you things are not quite as bad yet. Either way it will clarify your thinking, and get you going which is a good thing - startup limbo is a depressing place to be in for long.
One more thing: for an entrepreneur, planning to recognize failure and how to exit (notice 'exit', not 'handle') in that case is just about the hardest thing to do, especially when you're bursting with enthusiasm for the great idea that you're just launching. But, it's worse if you try to do it after the fact, since as an entrepreneur, you're hard-wired to believe in success. The trick is to consider it part of the business plan, your personal one, that you should build before you do the one for your startup. Then you'll be all set to look before, and after, you leap.
Picking the startup idea
This seems to be the biggest challenge for most first-time entrepreneurs: picking the idea to work on. Last week I was speaking to a young man, a recent college grad in a corporate job, who was trying to figure out which space he should focus on for a startup as he really, really wanted to be an entrepreneur. And just yesterday I had a chai with a more seasoned, experienced Stanford MBA who was not only looking for a career change but wanted her work life to have more 'meaning' and was wondering how to go about finding it.
I don't think the two situations are really that different. Here's why. If there's one over-riding requirement for a startup, it is the passion that the entrepreneur brings to it (I've tried to wax eloquent on this subject numerous times on this blog: check out the passion label for more). And you can't start off with what's the 'hot' space to get all fired up about it. OK, you could, but you'd only get fired up about the potential to make money, and wiser folks have determined that money is not the fuel of choice - it's kind of like burning coal, ubiquitous and cheap, but capable of dirtying everything around it and clouding your thinking with the unhealthy fumes. You do take it for granted that you're doing this to make money, lots of it, but there has to be something else that gets you out of bed everyday to rally the troops, slay the dragons, scale the mountains, build the bridges and whatever other heroic metaphor you'd choose for the daily challenges of the startup life.
You can stumble upon an idea of course (there's one that worked!). Whether it is is your corporate job, your volunteer work, your education or just your daily life at home and play, you may run across something that seems fun, useful and with business potential. Ideas are everywhere, but they may not all translate into viable businesses, or, even if they did, may not be the one for you. One of my long-running this-is-going-nowhere ideas is to figure out an useful way to give my business ideas to people who may want to do something with them. And the reason I don't want to hold on to these ideas is that though they're intellectually exciting, I can't see myself getting enthused about executing on them. The reasons are many, but most of all, it's because they don't light a fire in me. But what's ho-hum for me may be a blockbuster extravaganza for someone else. The only downside to the I'll-pick-the-idea-from-the-ones-I-bump-into approach is that it could take a very long time, and cause a massive headache (may not be just figurative).
So my advice was (and is): first pick the area that you're passionate and excited about (or at least care a lot about), be it investment banking, online gaming, cupcake baking or teaching the world to sing. If you're already immersed in that space, you're almost there - all you have to do is go about it with your eyes, ears and mind (pay attention to that bias-prone mind!) open, looking for opportunities. If you feel you're not yet an expert in that area, go learn about it. Get to know the players and pitfalls. If you can't walk the talk, at least spend beaucoup hours watching those who do. And somewhere along the way, you, with your entrepreneurial bent and blazing desire to do something in this particular field, will have the longed-for epiphany, and YOUR IDEA, drumrolls and all, will shimmy into the spotlight. And then the fun begins.
I don't think the two situations are really that different. Here's why. If there's one over-riding requirement for a startup, it is the passion that the entrepreneur brings to it (I've tried to wax eloquent on this subject numerous times on this blog: check out the passion label for more). And you can't start off with what's the 'hot' space to get all fired up about it. OK, you could, but you'd only get fired up about the potential to make money, and wiser folks have determined that money is not the fuel of choice - it's kind of like burning coal, ubiquitous and cheap, but capable of dirtying everything around it and clouding your thinking with the unhealthy fumes. You do take it for granted that you're doing this to make money, lots of it, but there has to be something else that gets you out of bed everyday to rally the troops, slay the dragons, scale the mountains, build the bridges and whatever other heroic metaphor you'd choose for the daily challenges of the startup life.
You can stumble upon an idea of course (there's one that worked!). Whether it is is your corporate job, your volunteer work, your education or just your daily life at home and play, you may run across something that seems fun, useful and with business potential. Ideas are everywhere, but they may not all translate into viable businesses, or, even if they did, may not be the one for you. One of my long-running this-is-going-nowhere ideas is to figure out an useful way to give my business ideas to people who may want to do something with them. And the reason I don't want to hold on to these ideas is that though they're intellectually exciting, I can't see myself getting enthused about executing on them. The reasons are many, but most of all, it's because they don't light a fire in me. But what's ho-hum for me may be a blockbuster extravaganza for someone else. The only downside to the I'll-pick-the-idea-from-the-ones-I-bump-into approach is that it could take a very long time, and cause a massive headache (may not be just figurative).
So my advice was (and is): first pick the area that you're passionate and excited about (or at least care a lot about), be it investment banking, online gaming, cupcake baking or teaching the world to sing. If you're already immersed in that space, you're almost there - all you have to do is go about it with your eyes, ears and mind (pay attention to that bias-prone mind!) open, looking for opportunities. If you feel you're not yet an expert in that area, go learn about it. Get to know the players and pitfalls. If you can't walk the talk, at least spend beaucoup hours watching those who do. And somewhere along the way, you, with your entrepreneurial bent and blazing desire to do something in this particular field, will have the longed-for epiphany, and YOUR IDEA, drumrolls and all, will shimmy into the spotlight. And then the fun begins.
A pitch in time
No worries. This is not yet another wannabe expert telling the startup world how to craft your pitch when you go for funding. A veritable horde of VCs, angels, consultants, B-school profs, and a few entrepreneurs (not too many of those though) have taken on the burden of coaching you on just that. Many are useful, and I must admit it is kind of fun to see the different approaches (try these two for a poles-apart stance: the third 'do' in Tips for Presenting to Angel Investors and Guy Kawasaki's creed on The 10/20/30 Rule).
What no one comes right out and says is: the more you have to say, the easier it is to say it - even if it is boiled down to 10 slides of 3 bullets each. In other words, the more you have accomplished in building your startup, the less you have to worry about what to say and can fiddle instead with fonts, colors, syntax and such happy stuff. But this becomes a bit of a catch-22 if you're in the seed stage and looking for funds.
Conventional wisdom holds (does so with super-glue effect) that investors fund based on the team, the potential market and the technology - at any stage, just expecting more at each. It is tempting to think that just because the guy/gal across the table is spitting enthused about your idea they'd want to do something to make it happen. Not so. Investors are in the business of investing, which means they want big returns with little risk. And ideas, however compelling, don't turn themselves into booming businesses. So every aspect - team, technology, market - has to convey reduced risk and proven potential (which sounds like an oxymoron, but if you're familiar with a pitch, you'd know what I mean).
But a seed stage company is by definition just a notch beyond an idea. If you can moonlight or bootstrap for many months, you can build a working version of the product, get customers using it, scope out the market and get to the point you have something solid to pitch. (Of course, if you can fund it yourself, you're not obsessing about seed stage funds are you?) But what if that's not feasible? If you have a proven team with a stellar track record in startups (which means you could probably fund it yourself, but choose not to do it all yourself), investors could be sold on your spiel even if there's nothing you can show them. If you're not proven, but are a band of engineers from a top university who've worked on a project you want to commercialize - you're in too, heck, you're probably batting away the term sheets.
Does this mean that entrepreneurs who don't fit the slam-dunk mold for funding should give up on their ideas? Of course not. Real entrepreneurs don't do that. They don't let articles on how to do presentations take away their confidence because they don't have a 'strong story'. They continue building their startups and go for funding when it seems necessary. What they do is get creative. They figure out how they can show reduced risk and proven potential with what they have. They lead with their strengths and they lead with passion and determination. And all that can build one heckuva punchy PowerPoint.
What no one comes right out and says is: the more you have to say, the easier it is to say it - even if it is boiled down to 10 slides of 3 bullets each. In other words, the more you have accomplished in building your startup, the less you have to worry about what to say and can fiddle instead with fonts, colors, syntax and such happy stuff. But this becomes a bit of a catch-22 if you're in the seed stage and looking for funds.
Conventional wisdom holds (does so with super-glue effect) that investors fund based on the team, the potential market and the technology - at any stage, just expecting more at each. It is tempting to think that just because the guy/gal across the table is spitting enthused about your idea they'd want to do something to make it happen. Not so. Investors are in the business of investing, which means they want big returns with little risk. And ideas, however compelling, don't turn themselves into booming businesses. So every aspect - team, technology, market - has to convey reduced risk and proven potential (which sounds like an oxymoron, but if you're familiar with a pitch, you'd know what I mean).
But a seed stage company is by definition just a notch beyond an idea. If you can moonlight or bootstrap for many months, you can build a working version of the product, get customers using it, scope out the market and get to the point you have something solid to pitch. (Of course, if you can fund it yourself, you're not obsessing about seed stage funds are you?) But what if that's not feasible? If you have a proven team with a stellar track record in startups (which means you could probably fund it yourself, but choose not to do it all yourself), investors could be sold on your spiel even if there's nothing you can show them. If you're not proven, but are a band of engineers from a top university who've worked on a project you want to commercialize - you're in too, heck, you're probably batting away the term sheets.
Does this mean that entrepreneurs who don't fit the slam-dunk mold for funding should give up on their ideas? Of course not. Real entrepreneurs don't do that. They don't let articles on how to do presentations take away their confidence because they don't have a 'strong story'. They continue building their startups and go for funding when it seems necessary. What they do is get creative. They figure out how they can show reduced risk and proven potential with what they have. They lead with their strengths and they lead with passion and determination. And all that can build one heckuva punchy PowerPoint.
Sticking with it
Last week I attended the Global IIT conference in Santa Clara. Jeff Immelt of GE was one of the keynote speakers. His was an interesting speech. It was not a rah-rah, high-energy, evangelizing one, but a comfortable 'this is what I think about' kind, where he didn't seem to mind taking a controversial position now and then. He touched on a variety of different points, globalization (good but only if it is win-win), energy (nuclear is not all bad) etc. He also talked about what new grads should look for in a job and asserted that building something is the most satisfying aspect of business. His advice was whether you were in a big company or a startup, you should stick with it for a few years and take part in building it.
This definitely resonated with me. Especially in startups, it is all about building - the product, the market, the team, the company itself. It is hard work though, and to add to the challenge, there is a generous dash of risk and uncertainty about everything in a startup. While it is very exciting, it has all the appeal of teetering on the edge of a cliff in a strong wind - never mind the amazing view. I recently ran across a couple of very competent, successful corporate managers who couldn't understand why anyone would want to work in a startup if you had to make do without admin help. Even the promise of a big monetary payoff doesn't seem worth the effort.
But for some, especially those with the entrepreneurial bent, building something delivers a huge rush. It's what rolls you off the bed at 6:00am for a conference call when you've been up until 3:00 getting ready for a demo. It's the excitement of the first splash page, the first non-founder employee, the first office address (which is not your home), the first user trial - every little milestone that proves that the company is becoming more real and is moving ahead and you're stepping back just a bit from the cliff's edge.
Immelt also talked about what it would take for new ideas to win, that's for the next post. Building takes commitment, and the satisfaction of building a company is one thing that every startup entrepreneur has in common with the CEO of GE - it's nice to be reminded of these self-evident truths once in a while.
This definitely resonated with me. Especially in startups, it is all about building - the product, the market, the team, the company itself. It is hard work though, and to add to the challenge, there is a generous dash of risk and uncertainty about everything in a startup. While it is very exciting, it has all the appeal of teetering on the edge of a cliff in a strong wind - never mind the amazing view. I recently ran across a couple of very competent, successful corporate managers who couldn't understand why anyone would want to work in a startup if you had to make do without admin help. Even the promise of a big monetary payoff doesn't seem worth the effort.
But for some, especially those with the entrepreneurial bent, building something delivers a huge rush. It's what rolls you off the bed at 6:00am for a conference call when you've been up until 3:00 getting ready for a demo. It's the excitement of the first splash page, the first non-founder employee, the first office address (which is not your home), the first user trial - every little milestone that proves that the company is becoming more real and is moving ahead and you're stepping back just a bit from the cliff's edge.
Immelt also talked about what it would take for new ideas to win, that's for the next post. Building takes commitment, and the satisfaction of building a company is one thing that every startup entrepreneur has in common with the CEO of GE - it's nice to be reminded of these self-evident truths once in a while.
Promoting entrepreneurship
Last week I was one of the panelists speaking about entrepreneurship to about 100 or so Fulbright scholars currently in various US schools. What made it interesting was that they were predominantly from developing nations and this panel was part of a 3-day immersion in technology and startups and the Silicon Valley vibe - with the hope that they will take some of it back with them when they go home.
It was an interesting balancing act to focus on entrepreneurship, but not convey the impression that it's the only way to go, considering that the panel consisted of two entrepreneurs, a VC and startup consultant. So there were many qualifiers of 'not everybody has to be an entrepreneur' or 'you can learn a lot from working in a big company'. One of the panelists was Gibu Thomas, who I've written about in a previous post as being the quintessential passionate entrepreneur, and he was effective in the balancing act because, true to form, he focused on passion. His message was simply that they should seek to effect change and be passionate about whatever they do. One hopes that the young audience got that, along with the 'how-to's and 'what-if's that were also covered.
I must confess that personally, the best part of the panel was when the students stopped by to discuss their ideas and plans afterwards. It was very enlightening, and it also made me appreciate how much easier entrepreneurs have it in places like Silicon Valley. More than one student mentioned having problems 'back home' with the government, or society, or family, sometimes all three, making it very difficult to be an entrepreneur. It's not that you can't do a startup in these countries, it just means you need a heckuva lot more staying power and help from others to deal with an environment that's not conducive to them. But the most encouraging thing of all was the number of students who stopped by to talk about 'social entrepreneurship'. It was fun to hear their ideas and reinforce their belief that they can do good and make a nice chunk of change while doing so. I hope they stay in touch, I'm looking forward to hearing more about how they're changing lives for a living.
It was an interesting balancing act to focus on entrepreneurship, but not convey the impression that it's the only way to go, considering that the panel consisted of two entrepreneurs, a VC and startup consultant. So there were many qualifiers of 'not everybody has to be an entrepreneur' or 'you can learn a lot from working in a big company'. One of the panelists was Gibu Thomas, who I've written about in a previous post as being the quintessential passionate entrepreneur, and he was effective in the balancing act because, true to form, he focused on passion. His message was simply that they should seek to effect change and be passionate about whatever they do. One hopes that the young audience got that, along with the 'how-to's and 'what-if's that were also covered.
I must confess that personally, the best part of the panel was when the students stopped by to discuss their ideas and plans afterwards. It was very enlightening, and it also made me appreciate how much easier entrepreneurs have it in places like Silicon Valley. More than one student mentioned having problems 'back home' with the government, or society, or family, sometimes all three, making it very difficult to be an entrepreneur. It's not that you can't do a startup in these countries, it just means you need a heckuva lot more staying power and help from others to deal with an environment that's not conducive to them. But the most encouraging thing of all was the number of students who stopped by to talk about 'social entrepreneurship'. It was fun to hear their ideas and reinforce their belief that they can do good and make a nice chunk of change while doing so. I hope they stay in touch, I'm looking forward to hearing more about how they're changing lives for a living.
Teens, tech and entrepreneurs
Last week I attended an event organized by SDForum, called Next Generation Tech: Teens Plugged In. I must commend the organizers for pulling together a very interesting event. Instead of the usual talking heads, they had (separate) panels of high-schoolers and college kids who pretty much held court for most of the morning. It was a most refreshing change.
The purpose was to hear teens' views on technology (and also entrepreneurship). The teens were certainly fully plugged in, all inseparable from their cell phones and iPods, and incredulous that folks grew up without the Internet. But what was most telling is that they consider all of the above as merely tools, a way for them to do what they've always wanted to do: hang out with friends, listen to music or get their work done faster and easier - just what teenagers have done for ages. In fact, even the young man who fessed up to using the above-mentioned devices to help in a test was just updating the hoary cheat sheet. And as always, there are the kids that keep to the rules and those that break them and like to keep pushing the envelope. Technology hasn't fundamentally changed their behavior or values, but it has vastly increased the scope and impact.
It was also interesting to see what a difference a few years made - the college kids were more serious about technology, even when discussing the same topic of cell phones as the teens. It may be because more than half seemed to be CS majors - and I was disappointed that there were no women in the college panel, unlike the well balanced high school panel.
There were a couple of high school and college entrepreneurs there too. Most interesting was Ben Casnocha, who kicked off the session. He's still a teenager though his company is 6 years old, and he was asked to comment on the differences between the young and not-so-young entrepreneurs. His take was there was too much hyper-ventilation on the subject; the reality is that it all comes down how well you work with people, and age is not the determining factor. He spoke very perceptively on this and other subjects; seems like those six years packed a lot of experience.
This event was doubly interesting to me as just the previous week I'd heard a bunch of teenagers pitching their business plans (see post). The previous one featured at-risk kids from dodgy neighborhoods, and their mentors used entrepreneurship to help them finish high school and motivate them to aspire to college. At the SDForum teen tech event the kids were from top suburban schools, where entrepreneurship is often a passion, and a ticket to the Ivies. Until we see the under-resourced teens start pitching business ideas based on technology, like the ones in the tech event are pursuing, we know we still have the 'digital divide' in our country, and it needs attention, especially from those of us in tech arena.
The purpose was to hear teens' views on technology (and also entrepreneurship). The teens were certainly fully plugged in, all inseparable from their cell phones and iPods, and incredulous that folks grew up without the Internet. But what was most telling is that they consider all of the above as merely tools, a way for them to do what they've always wanted to do: hang out with friends, listen to music or get their work done faster and easier - just what teenagers have done for ages. In fact, even the young man who fessed up to using the above-mentioned devices to help in a test was just updating the hoary cheat sheet. And as always, there are the kids that keep to the rules and those that break them and like to keep pushing the envelope. Technology hasn't fundamentally changed their behavior or values, but it has vastly increased the scope and impact.
It was also interesting to see what a difference a few years made - the college kids were more serious about technology, even when discussing the same topic of cell phones as the teens. It may be because more than half seemed to be CS majors - and I was disappointed that there were no women in the college panel, unlike the well balanced high school panel.
There were a couple of high school and college entrepreneurs there too. Most interesting was Ben Casnocha, who kicked off the session. He's still a teenager though his company is 6 years old, and he was asked to comment on the differences between the young and not-so-young entrepreneurs. His take was there was too much hyper-ventilation on the subject; the reality is that it all comes down how well you work with people, and age is not the determining factor. He spoke very perceptively on this and other subjects; seems like those six years packed a lot of experience.
This event was doubly interesting to me as just the previous week I'd heard a bunch of teenagers pitching their business plans (see post). The previous one featured at-risk kids from dodgy neighborhoods, and their mentors used entrepreneurship to help them finish high school and motivate them to aspire to college. At the SDForum teen tech event the kids were from top suburban schools, where entrepreneurship is often a passion, and a ticket to the Ivies. Until we see the under-resourced teens start pitching business ideas based on technology, like the ones in the tech event are pursuing, we know we still have the 'digital divide' in our country, and it needs attention, especially from those of us in tech arena.
The entrepreneurial incentive
Last weekend I was a judge at the Youth Business Plan competition at BUILD. I've written about their organization and founder/CEO in a previous post, and I'm always excited by what they do as they blend two my favorite interests, entrepreneurship and education, to make a difference in the life of hundreds of kids. In short, they take the kids who're at risk of dropping out of high school and get them studying, graduating and even getting into college by using the hook of starting their own business venture. During this process they learn about biz plans and everything that entails, and get to present to a group of judges, with winning plans getting funding (upto $1000) and incubator privileges. This is not too far off from what we far more seasoned entrepreneurs do. It was amazing to see the poise with which these high school freshmen handled questions about their competition, execution timeline, operating costs etc. from the judges (who were the de facto investors group).
There were some other very interesting parallels between the high-tech startups and the businesses pitched by the kids.
This was the most fun I've had with business plans lately. The future's brighter because of organizations like BUILD - check them out, you may find it interesting and maybe end up helping them.
There were some other very interesting parallels between the high-tech startups and the businesses pitched by the kids.
- Variations on a theme. There were a ton of t-shirt concepts, similar to the current 'social networking' flood, which made the rare 'planter' idea stand out.
- Prototypes have punch. The best-received plans all had a sample/prototype that could be seen and touched.
- Passion matters. The teams that showed the most enthusiasm, as a team, not just individuals, got more points.
- Preparation is critical. The teams that had done the most up-front work seemed most likely to follow through on execution.
- Feasibility trumps. Though some teams had more interesting ideas, or more compelling 'CEOs', or better ROIs, the winning team was the one that seemed most likely to succeed on execution, demonstrated by how well they handled every aspect of the presentation, from attire and eye-contact to market research and sales plans. They showed preparation, passion and a clear understanding of how they will make what the customers want and how to sell to them. Like any other venture, they were the safest bet for the investor - the dream of every entrepreneur.
- Social networking is everything. They were all going to use MySpace and Facebook to get the word out - in their case, it was real.
This was the most fun I've had with business plans lately. The future's brighter because of organizations like BUILD - check them out, you may find it interesting and maybe end up helping them.
The stealth mode startup
I'm betting 8 out of 10 startups begin by being in the 'stealth' mode (that's based on a scientifically conducted multi-year study of course). Most of the entrepreneurs I run into, who've just launched companies, are quick to claim they're stealth, or 'under the radar' - that's true for moi too - and it can persist for quite a while.
So why do entrepreneurs like me go 'stealth'? It's primarily because they don't want anyone else ripping off their idea. This presumably changes when they've got enough funding, staffing and traction that it doesn't matter - or more likely, when publicity is required to build traction. Of course that begs the question, is your idea that easy to rip off? Don't you have some deep, complex IP that takes six PhDs six years to construct? Not so much in the web world, and not even in the enterprise arena. And entrepreneurs are a paranoid bunch - and often need to be so. (I admit to sometimes using the 'stealth' term as a cop out since I don't really want to discuss it with a given person or group - a negative vibe thing.) So 'stealth' is understandable, accepted and occasionally considered glamorous and attractive, especially if you're stealth even after VC funding.
But there's a down side to stealth. There's not enough info about your venture to get people excited. And you and your team are constantly weighing what to say and to whom. Investors don't do NDAs, and standard business practices don't always favor the early stage entrepreneur. You can pick who you pitch to, but can't bet they're in the clear - for all you know, they might be doing due diligence on a competitor, and you're it. (That's another topic though.) What about potential candidates? In a tough market, what you do is an important part of the mix. How much can you tell? I did a previous post on this - TMI - and this is continuation on the musings.
The website is another big challenge. Usually people look at the website to get an idea of the company - not just what it is about, but what it is like. Most stealth ones say very little. Are you missing a key hiring edge? This is a question my team is struggling with right now. How can we make ourselves interesting without revealing too much. Not very easy to do, as we can't even look at other similar startups to see how they've handled it (they're in stealth, duh). But we're at least decided on what it should have: much ado about nothing.
So why do entrepreneurs like me go 'stealth'? It's primarily because they don't want anyone else ripping off their idea. This presumably changes when they've got enough funding, staffing and traction that it doesn't matter - or more likely, when publicity is required to build traction. Of course that begs the question, is your idea that easy to rip off? Don't you have some deep, complex IP that takes six PhDs six years to construct? Not so much in the web world, and not even in the enterprise arena. And entrepreneurs are a paranoid bunch - and often need to be so. (I admit to sometimes using the 'stealth' term as a cop out since I don't really want to discuss it with a given person or group - a negative vibe thing.) So 'stealth' is understandable, accepted and occasionally considered glamorous and attractive, especially if you're stealth even after VC funding.
But there's a down side to stealth. There's not enough info about your venture to get people excited. And you and your team are constantly weighing what to say and to whom. Investors don't do NDAs, and standard business practices don't always favor the early stage entrepreneur. You can pick who you pitch to, but can't bet they're in the clear - for all you know, they might be doing due diligence on a competitor, and you're it. (That's another topic though.) What about potential candidates? In a tough market, what you do is an important part of the mix. How much can you tell? I did a previous post on this - TMI - and this is continuation on the musings.
The website is another big challenge. Usually people look at the website to get an idea of the company - not just what it is about, but what it is like. Most stealth ones say very little. Are you missing a key hiring edge? This is a question my team is struggling with right now. How can we make ourselves interesting without revealing too much. Not very easy to do, as we can't even look at other similar startups to see how they've handled it (they're in stealth, duh). But we're at least decided on what it should have: much ado about nothing.
Startup CEO's Role - Part 2
I'd written an earlier post about how the startup CEO's primary role is that of communicator. It's already been established that in a startup you wear many costumes, er, hats, so I think I should add another one - that of cheerleader (maybe 'motivational speaker' would go better with communicator, except it's all Tony Robbins).
I realize that to a large extent the CEO is responsible for the momentum, enthusiasm, energy, vibe - maybe spirit would be a workable term here - of the startup. First, you do it by hiring high-energy, give-it-110% kind of people. But you can't check off that box and consider the job done. It takes a while for people to get gung-ho about something new so you have to work at fanning the flames pretty consistently.
I thought about this at a small nonprofit fundraiser that I helped in last weekend. Passionately dedicated volunteers had done tons of work to get ready and put out the food, the wine, the auction items, and the over-priced trinkets, they'd turned on the music and videos...all the usual stuff. And everyone who showed up, by invitation, presumably came to spend as they've done in the past. But, it needed an MC, a rabble-rouser, someone that got them excited about being there, someone who brought some spirit to the proceedings. And no surprise, it was the founder of the nonprofit who took over the mike and got people energized about doing exactly what they came to do, i,e., spend money to support the cause.
This experience inspired me to share some good news with my team immediately instead of waiting for the next day. Spirit doesn't just materialize because all the components are there, you have to create and develop it. I can let myself get swamped with meetings, paperwork and all the other things that have schedules and due dates, and do need a periodic reminder that one of my chief responsibilities has nothing to do with any of this stuff. I enjoy the amped up enthusiasm in a startup, and have to make sure that the team has enough material to be stoked or it'll end up being more routine than rah-rah. We can't talk about just product roadmaps and revenue plans all the time, I need to encourage them with other tidbits too - potential candidates, chats with investors, demo feedback, market trends and even how other startups are faring. In the early stages when you don't have much to show by way of monetary success, all sorts of things can have an impact in building the energy. The good news is that in time you can retire your pom-pom as your team would have taken over the cheerleading and you just have to pipe in with an occasional 'woo-woo'.
I realize that to a large extent the CEO is responsible for the momentum, enthusiasm, energy, vibe - maybe spirit would be a workable term here - of the startup. First, you do it by hiring high-energy, give-it-110% kind of people. But you can't check off that box and consider the job done. It takes a while for people to get gung-ho about something new so you have to work at fanning the flames pretty consistently.
I thought about this at a small nonprofit fundraiser that I helped in last weekend. Passionately dedicated volunteers had done tons of work to get ready and put out the food, the wine, the auction items, and the over-priced trinkets, they'd turned on the music and videos...all the usual stuff. And everyone who showed up, by invitation, presumably came to spend as they've done in the past. But, it needed an MC, a rabble-rouser, someone that got them excited about being there, someone who brought some spirit to the proceedings. And no surprise, it was the founder of the nonprofit who took over the mike and got people energized about doing exactly what they came to do, i,e., spend money to support the cause.
This experience inspired me to share some good news with my team immediately instead of waiting for the next day. Spirit doesn't just materialize because all the components are there, you have to create and develop it. I can let myself get swamped with meetings, paperwork and all the other things that have schedules and due dates, and do need a periodic reminder that one of my chief responsibilities has nothing to do with any of this stuff. I enjoy the amped up enthusiasm in a startup, and have to make sure that the team has enough material to be stoked or it'll end up being more routine than rah-rah. We can't talk about just product roadmaps and revenue plans all the time, I need to encourage them with other tidbits too - potential candidates, chats with investors, demo feedback, market trends and even how other startups are faring. In the early stages when you don't have much to show by way of monetary success, all sorts of things can have an impact in building the energy. The good news is that in time you can retire your pom-pom as your team would have taken over the cheerleading and you just have to pipe in with an occasional 'woo-woo'.
Why entrepreneurs start companies
Yes, the subject is one that will continually fascinate and drive discussion (and some of us to distraction). I've visited this subject myself in an early post. To recap, I think an entrepreneur could be motivated by money, or the dislike of working for someone else, or the lack of a viable job, or, the one that interests me, by an idea that refuses to be shunted aside.
So why am I writing about this again? I was reaching out to a tech expert about referrals, and checked out his blog, which had a response about someone else's post on why people do startups. The original post leans towards the thought that it's the prospect of incredible wealth the drives people into startups. The response, in brief, calls this moonshine.
Granted, both are discussing the issue in terms of economic inequality or the lack thereof. And what makes someone join a startup may be substantially different from what makes someone start it. All I know is, from an entrepeneur's viewpoint, it can't just be about money. Every entrepreneur I know would definitely want the I-too-have-my-own-Boeing payoff, but all of them are driven by other goals. I remember one of them telling me when I started my first company 'if you're doing this just for the money, you won't be able to handle the pressure - you'd walk away and get a corporate job the first time you can't make payroll or your customers don't bite'. I can tell from personal experience this was absolutely spot on. And on my second one, I'm meeting many fellow entrepreneurs who're launching startups not only for the value of the product/service, but for the chance to build a different kind of company, one that resonates with their values. Maybe they'll never be the next Google, but they could very well keep a bunch of people happy and solvent too. It may sound idealistic, but whether they're only about the money are not, startups are all about dreams.
So why am I writing about this again? I was reaching out to a tech expert about referrals, and checked out his blog, which had a response about someone else's post on why people do startups. The original post leans towards the thought that it's the prospect of incredible wealth the drives people into startups. The response, in brief, calls this moonshine.
Granted, both are discussing the issue in terms of economic inequality or the lack thereof. And what makes someone join a startup may be substantially different from what makes someone start it. All I know is, from an entrepeneur's viewpoint, it can't just be about money. Every entrepreneur I know would definitely want the I-too-have-my-own-Boeing payoff, but all of them are driven by other goals. I remember one of them telling me when I started my first company 'if you're doing this just for the money, you won't be able to handle the pressure - you'd walk away and get a corporate job the first time you can't make payroll or your customers don't bite'. I can tell from personal experience this was absolutely spot on. And on my second one, I'm meeting many fellow entrepreneurs who're launching startups not only for the value of the product/service, but for the chance to build a different kind of company, one that resonates with their values. Maybe they'll never be the next Google, but they could very well keep a bunch of people happy and solvent too. It may sound idealistic, but whether they're only about the money are not, startups are all about dreams.
The Early Stage Startup Environment
Last week I had the unusual experience of trying to describe what an early stage startup environment is like - to three different people. Why unusual? Maybe because most of the people I run into in Silicon Valley have experience with, or knowledge of, startups - everyone seems to have a friend or acquaintance who's given them the low-down on the startup world. So, I had to actually stop and think before I replied the first time, and the second time I realized I'd missed something and the third time I realized I was rambling - so I decided to take a stab at writing down my thoughts.
- You don't know anything.
- If it's your first time, this applies to everything from incorporation to insurance to interns. Unless your entire team has worked together before in pretty much the same way, you don't know how the team dynamics will shake out and how that will affect your offerings. And unless you're doing the exact same thing that you've done before (er, why would you?), there are a lot of unknowns on product, market, roadmap etc. But, this doesn't, and shouldn't, stop you. You build your business plan, trying to apply some probability to the unknowns; you bring new people on board mitigating the risk with in-depth communications (or, personality tests per the new trend ); you make innumerable changes to your product design based on continuous analysis and prototypes - in short, you adjust and adapt constantly while moving forward rapidly. And you will someday reach a space where your plans are solid for a week, a month, and then wow, a whole quarter and you can confidently put your mission up on the wall without having to bring it down for tweaking.
- You don't have anything.
- This may not apply to those who're able to land funding (or put in money themselves) right from the get go, but most startups don't have money in the beginning. Which means you don't have enough people, so your architect does competitive analysis, while the CEO's plugging away at QuickBooks and your CTO's ordering coffee as there's no admin. If you do have some money, you don't have full product requirements developed, or your target customer profiled in detail, or the architecture all figured out. In the early stages, your dreams are outpacing your means by many miles.
- You are obsessed.
- The team believes they're all rock stars and what they're working on is going to change the world, and you all get a little weird because you can think of nothing else in a sustained fashion. So when a friend talks about traveling to Peru your mind's wandering off wondering if that could be a future market, and when you're invited for a weekend getaway you don't jump for joy because you'd have to reschedule your Saturday con call. The early stage is fueled by passion, which is a good thing, given #1 an #2 above (it does get more tempered with time).
Startup CEO's Role - Part 1
There are a lot of things that the Founder CEO should be doing, and a lot of things s/he gets involved in, from pricing discussions to the brand of coffee to be bought. At the entrepreneurship conference I'd mentioned in a previous post, one speaker was very emphatic on what startup CEO should be doing: getting the team committed to the vision, holding people accountable, and communicating constantly. The more I think about it, the more it seems that they all boil down to just one thing: communicating.
Every once in a while I feel that the whole communication thing is being overdone and let's get on with the execution already. And then something happens which brings home the point that the communication didn't happen as it should and created a glitch in, what else, execution. A case in point: we'd started work on a 'proof of concept' and our small team got together and defined what we wanted to the engineer. At that time, there was some talk about what platform the POC should be built on and I'd responded I didn't care what the platform choice was as it would be a throw-away - we'll figure it out before we started the product development, while the POC would be used for presentation, validation, discussion etc., for a few months. The engineer who was developing the POC got all that, but unfortunately construed the 'throw-away' part to imply that once it was done it would be static, i.e., the POC itself may not enhanced or modified. That's about as likely in a startup as having a business plan cast in stone. Luckily, he was able to mitigate the effects of the choices he'd made based on this misunderstanding, but it was not without some cost.
In this case it was not a lack of communication that caused the disconnect, but forgetting that slangy phrases that are open to interpretation should not be used in specifications (even if it's only in a casual conversation), and that not everyone has the same grasp of the big picture as you do and may interepret statements differently (most engineers should not be expected to think like the CEO, regardless of how many 'vision' and 'strategy' sessions you may have). It's much better to spell it out than throw it out.
And this is just the tip of the iceberg. When I think of all the other nuances of communications in a startup: dealing with different styles, personalities, levels of expertise, virtual teams, and that's not even considering the external constituents such as investors, I think it's time to redefine the role. It should be Chief Communications Officer, because there's no execution without effective communication. (And no, lots of meetings do not make for good communications, and meetings are a whole different topic.) Startup CCO: it's a good way to remember what you're supposed to be doing.
Every once in a while I feel that the whole communication thing is being overdone and let's get on with the execution already. And then something happens which brings home the point that the communication didn't happen as it should and created a glitch in, what else, execution. A case in point: we'd started work on a 'proof of concept' and our small team got together and defined what we wanted to the engineer. At that time, there was some talk about what platform the POC should be built on and I'd responded I didn't care what the platform choice was as it would be a throw-away - we'll figure it out before we started the product development, while the POC would be used for presentation, validation, discussion etc., for a few months. The engineer who was developing the POC got all that, but unfortunately construed the 'throw-away' part to imply that once it was done it would be static, i.e., the POC itself may not enhanced or modified. That's about as likely in a startup as having a business plan cast in stone. Luckily, he was able to mitigate the effects of the choices he'd made based on this misunderstanding, but it was not without some cost.
In this case it was not a lack of communication that caused the disconnect, but forgetting that slangy phrases that are open to interpretation should not be used in specifications (even if it's only in a casual conversation), and that not everyone has the same grasp of the big picture as you do and may interepret statements differently (most engineers should not be expected to think like the CEO, regardless of how many 'vision' and 'strategy' sessions you may have). It's much better to spell it out than throw it out.
And this is just the tip of the iceberg. When I think of all the other nuances of communications in a startup: dealing with different styles, personalities, levels of expertise, virtual teams, and that's not even considering the external constituents such as investors, I think it's time to redefine the role. It should be Chief Communications Officer, because there's no execution without effective communication. (And no, lots of meetings do not make for good communications, and meetings are a whole different topic.) Startup CCO: it's a good way to remember what you're supposed to be doing.
The first test
This week was a very exciting one. We just had the first group of users test our product (a small working model of our product actually) and it was a huge rush. I think it is the sweetest thrill for an entrepreneur, even more so than getting funding, because the raison d'etre for your startup is building something that your customers will want and use.
There's a world of difference between theorizing about how the customer will use the product and actually watching someone use it. We did the usual, starting with initial observations, known best practices (aka what others have done), some leaps of imagination and plain old common sense and built a prototype/model/demo (not quite ready to be the alpha version). We had lined up a bunch of users to give it a go and give us feedback, and we thought the date was far enough out to make sure everything was the way it should be.
But there we were, three days before the test, and our small team didn't feel confident that we should put the demo in front of users. It was functional, but it didn't have the look and feel of our product vision, and there was concern that it would turn off the users. But I didn't want to postpone, not only because of logistical issues, but because I knew that if we wait until our demo is 100% ready we've waited too long. And I had faith that the users will view it with goodwill and be able to differentiate problems from potential.
So, we got everything lined up as well as we could and charged ahead - and turned out to be a most satisfying experience. There were no disasters, and the expected problems were only viewed as features they'd suggested we improve. It was gratifying to see the proto being used the way we intended - and in ways we could have never imagined. And the many new ideas they generated are invaluable, the stuff that will make the product truly fit their needs. And best of all, at the end of it, we'd got rock solid validation that we're on the right track with the product. No surprise, I'm pumped!
There's a world of difference between theorizing about how the customer will use the product and actually watching someone use it. We did the usual, starting with initial observations, known best practices (aka what others have done), some leaps of imagination and plain old common sense and built a prototype/model/demo (not quite ready to be the alpha version). We had lined up a bunch of users to give it a go and give us feedback, and we thought the date was far enough out to make sure everything was the way it should be.
But there we were, three days before the test, and our small team didn't feel confident that we should put the demo in front of users. It was functional, but it didn't have the look and feel of our product vision, and there was concern that it would turn off the users. But I didn't want to postpone, not only because of logistical issues, but because I knew that if we wait until our demo is 100% ready we've waited too long. And I had faith that the users will view it with goodwill and be able to differentiate problems from potential.
So, we got everything lined up as well as we could and charged ahead - and turned out to be a most satisfying experience. There were no disasters, and the expected problems were only viewed as features they'd suggested we improve. It was gratifying to see the proto being used the way we intended - and in ways we could have never imagined. And the many new ideas they generated are invaluable, the stuff that will make the product truly fit their needs. And best of all, at the end of it, we'd got rock solid validation that we're on the right track with the product. No surprise, I'm pumped!
You must believe
Belief is fortifying. It's stiffens your spine and thickens your skin so you don't easily get swayed from your chosen path. But what do you believe in (in the context of startups)?
When I attended the Entrepreneur's conference in the previous post, one of the panels had a group of successful founders discussing how they 'picked' their venture idea. Interestingly, in this particular group, they had not come up with an idea themselves, but rather sought and reviewed ideas for development. Some looked for the right numbers while others looked for something they could relate to (regardless of what they picked, sooner or later they made it their own). They needed to believe in the idea, however they got there, before they made the jump. Belief generates passion (check out any evangelist for proof).
But there's more. It is necessary to believe in the idea, but it is not sufficient. As an entrepreneur you have to believe in yourself and your ability to successfully build the company on the idea. This belief is what gives entrepreneurs grit, single-minded focus, and the ability to make mid-course corrections and ride the downs. Sometimes the effect of this belief may look like arrogance (OK, in some, it is arrogance), but without it, every nay-sayer, doubter and competitor could make you crash and revert to your safe corporate job. It cannot just be a matter of checking the boxes on skill sets, experience, industry contacts etc. There are many successful entrepreneurs who on paper would never appear to have what it takes - assuming they'd ever measure themselves against someone's else view of an 'ideal' entrepreneur. Filled with unswerving confidence in their idea, there's no room for self-doubt. There are no cycles wasted on 'Can I/Could I' concerns. Belief. Every startup is built on it.
When I attended the Entrepreneur's conference in the previous post, one of the panels had a group of successful founders discussing how they 'picked' their venture idea. Interestingly, in this particular group, they had not come up with an idea themselves, but rather sought and reviewed ideas for development. Some looked for the right numbers while others looked for something they could relate to (regardless of what they picked, sooner or later they made it their own). They needed to believe in the idea, however they got there, before they made the jump. Belief generates passion (check out any evangelist for proof).
But there's more. It is necessary to believe in the idea, but it is not sufficient. As an entrepreneur you have to believe in yourself and your ability to successfully build the company on the idea. This belief is what gives entrepreneurs grit, single-minded focus, and the ability to make mid-course corrections and ride the downs. Sometimes the effect of this belief may look like arrogance (OK, in some, it is arrogance), but without it, every nay-sayer, doubter and competitor could make you crash and revert to your safe corporate job. It cannot just be a matter of checking the boxes on skill sets, experience, industry contacts etc. There are many successful entrepreneurs who on paper would never appear to have what it takes - assuming they'd ever measure themselves against someone's else view of an 'ideal' entrepreneur. Filled with unswerving confidence in their idea, there's no room for self-doubt. There are no cycles wasted on 'Can I/Could I' concerns. Belief. Every startup is built on it.
Hanging with the faithful
About once a year, I like going to one of these entrepreneurial conferences that seem to abound in Silicon Valley. Granted, by now they all have a similar 'look and feel' - panels and presentations with various VCs, entrepreneurs who've made it and a few top execs from companies with buzz. From bagels for breakfast to networking at lunch, the format is pretty standard. So why would I want to go?
I go because it's a boost to the entrepreneurial spirit. It's kind of like a believer going to a religious gathering - you hang out with fellow believers, listen to impassioned speakers preaching to the choir, and maybe trade stories of personal epiphanies. The cool thing is that everyone there is a believer - I haven't yet met a skeptic of entrepreneurship at one of these events. That said, I do try to pick the best of the bunch for me - the ones with the highest level of energy, not necessarily the most high-profile speakers.
So, I'm going to the Stanford GSB Entrepreneurship Conference tomorrow essentially to get a booster shot, and in my book it's worth my while to take a little time off to do so. I'm sure I'll pick up some interesting pointers here and there, but mostly I hope to get an entrepreneurial charge. We all need it every now and then.
I go because it's a boost to the entrepreneurial spirit. It's kind of like a believer going to a religious gathering - you hang out with fellow believers, listen to impassioned speakers preaching to the choir, and maybe trade stories of personal epiphanies. The cool thing is that everyone there is a believer - I haven't yet met a skeptic of entrepreneurship at one of these events. That said, I do try to pick the best of the bunch for me - the ones with the highest level of energy, not necessarily the most high-profile speakers.
So, I'm going to the Stanford GSB Entrepreneurship Conference tomorrow essentially to get a booster shot, and in my book it's worth my while to take a little time off to do so. I'm sure I'll pick up some interesting pointers here and there, but mostly I hope to get an entrepreneurial charge. We all need it every now and then.
Barrier to entry
Times have changed. It used to be that a startup had to show a 'significant barrier to entry' in terms of IP that is not easy to replicate due to technical complexity, deep domain competence and, often, the large number of person-months that went into building the product. Flaunting the barrier was pretty much de rigueur for funding conversations.
But things are very different for web apps now. Tools are readily available (experienced developers, not so much) and development is usually fast and cheap. A large number of companies that have consumer-oriented products don't always have unapproachable, deep technology that would daunt other developers. What they do have is the other requirement for success: eye-popping traction with legions of users. Many successful offerings (YouTube being a prime example) did not start off with a complex product but they hit pay dirt when their user base started expanding geometrically. And most importantly (for revenue planning), this large user base will only come to your site if your offering is free.
As I was explaining to a would-be entrepreneur today, it is no longer about the complexity of the code. It is more about filling a need, doing it well enough to attract a large number of users and being able to extrapolate that to many millions. But, there is the slight catch that usually all this has to be done with very little money - maybe that's why not everyone who's a coder (or knows one) is an entrepreneur. Now there's a barrier to entry.
But things are very different for web apps now. Tools are readily available (experienced developers, not so much) and development is usually fast and cheap. A large number of companies that have consumer-oriented products don't always have unapproachable, deep technology that would daunt other developers. What they do have is the other requirement for success: eye-popping traction with legions of users. Many successful offerings (YouTube being a prime example) did not start off with a complex product but they hit pay dirt when their user base started expanding geometrically. And most importantly (for revenue planning), this large user base will only come to your site if your offering is free.
As I was explaining to a would-be entrepreneur today, it is no longer about the complexity of the code. It is more about filling a need, doing it well enough to attract a large number of users and being able to extrapolate that to many millions. But, there is the slight catch that usually all this has to be done with very little money - maybe that's why not everyone who's a coder (or knows one) is an entrepreneur. Now there's a barrier to entry.
Framing it right
Every entrepreneur who's done any research has heard about being ready with the 'elevator pitch' - in the event you shared a ride on the elevator with VC who somehow would rather ask what you are doing then stare at the flashing floor numbers, you'd be all set. All cynicism aside, it is really a good thing to be able to articulate your vision as crisply as possible. And it is good for you, the entrepreneur, not just the person who's listening to you.
I have been crafting a one-liner for a while now, and have used it pretty successfully. But, notice the 'have been' - it's gone through a lot of changes and and the reason is that I have to keep tweaking the words to say what I want. It is not so much that the startup idea changes week to week (that would be scary) but that my view of what I want people to think about gets clearer. Any product idea, even one that can be described in one sentence with a few words, has a lot more to it than just the 'what'. There's the how, the who for, the when, where and most of all why - and of course, the all important differentiator that sets you apart from the pack. And unfortunately, the natural tendency is to try to put them all into that one sentence just so there's nothing left to the imagination (and potential confusion).
Think about it - 'a car that dynamically shifts from conventional gas-power to one continuously recharging batteries to greatly reduce fuel consumption while delivering necessary power' tells you a lot, but doesn't leave you with the impact of a 'gas/electric hybrid car that gives you 50 mpg'. So the elevator pitch is not all about giving the most information in the shortest time, but making the best impression in the shortest time.
It may not be feasible for all entrepreneurs to articulate their product vision clearly from a wordsmithing perspective, which is why they seek marketing partners. But however they do it, the result is immensely helpful not only in getting the point across, but also in retaining your product focus. The more minutiae you have in your product thumbnail, the more likely you (and your potential audience) are to get side-tracked by them. I think framing your product crisply is particularly important when you're a startup - you have a lot more leeway when you're much bigger and more established. In my opinion, Google was successful because they set out to provide the best search engine, period - if they'd started off wanting to provide a search engine, along with email, a map app, news aggregator etc. , wow, they'd have been like Excite and maybe they'd have met a similar fate?
I have been crafting a one-liner for a while now, and have used it pretty successfully. But, notice the 'have been' - it's gone through a lot of changes and and the reason is that I have to keep tweaking the words to say what I want. It is not so much that the startup idea changes week to week (that would be scary) but that my view of what I want people to think about gets clearer. Any product idea, even one that can be described in one sentence with a few words, has a lot more to it than just the 'what'. There's the how, the who for, the when, where and most of all why - and of course, the all important differentiator that sets you apart from the pack. And unfortunately, the natural tendency is to try to put them all into that one sentence just so there's nothing left to the imagination (and potential confusion).
Think about it - 'a car that dynamically shifts from conventional gas-power to one continuously recharging batteries to greatly reduce fuel consumption while delivering necessary power' tells you a lot, but doesn't leave you with the impact of a 'gas/electric hybrid car that gives you 50 mpg'. So the elevator pitch is not all about giving the most information in the shortest time, but making the best impression in the shortest time.
It may not be feasible for all entrepreneurs to articulate their product vision clearly from a wordsmithing perspective, which is why they seek marketing partners. But however they do it, the result is immensely helpful not only in getting the point across, but also in retaining your product focus. The more minutiae you have in your product thumbnail, the more likely you (and your potential audience) are to get side-tracked by them. I think framing your product crisply is particularly important when you're a startup - you have a lot more leeway when you're much bigger and more established. In my opinion, Google was successful because they set out to provide the best search engine, period - if they'd started off wanting to provide a search engine, along with email, a map app, news aggregator etc. , wow, they'd have been like Excite and maybe they'd have met a similar fate?
In perfect balance
I did both the superhero and supervillain tests, and, setting aside the small issue of gender, the results prove that the hero in me is perfectly matched with the villain. Great qualities for a startup, right? I love the fantasy world!
Your results:
You are Superman
| You are mild-mannered, good, strong and you love to help others.
|
Click here to take the "Which Superhero are you?" quiz...
Now for the villain -
Your results:
You are Lex Luthor
| A brilliant businessman on a quest for world domination and the self-proclaimed greatest criminal mind of our time!
|
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