Wednesday, October 31, 2012

If you don't succeed with your startup. It's not your fault. If you're not successful, it is your fault

When startups fail (and the vast majority must, by the laws of probability), it's hard not to search for a scapegoat. After all, doesn't everyone deserve a glowing profile in TechCrunch?

Often, embittered entrepreneurs fall back on two explanations: Luck, and connections.

The luck-blamers take the position that startups are a crapshoot. "It's all a matter of luck. If we weren't unlucky, I would be Mark Zuckerberg."

The connections-conspiracy theorists take the opposite position--"they" are rigging the game. "Everyone knows that she'd buddies with Arrington. That's why they get all that coverage."

They're both right.

Luck plays a huge role in startup success. Out of every 1,000 startups, only 6 succeed in making money for investors. Do you think the right 6 always succeed?

Connections are also key. A VC can't fund a firm she never meets. It's no secret that the best way to get a meeting is to know the VC already.

But what gets me is that the blamers and haters don't take the next logical step--turning what they perceive as the world's unfairness to their advantage.

If you think it's all about luck, why aren't you trying more things?

If you think it's all about connections, why aren't you out trying to make those connections?

If you think you know the formula for success (getting lucky, knowing the right people), why not follow it?

If you don't succeed with your current startup. It's not your fault. But if you're not successful in your career, it is your fault.

Tuesday, October 30, 2012

The only ways hype helps startups is to a) raise money b) attract customers c) recruit employees

At TechCrunch Disrupt, legendary venture capitalist (and Sun Microsystems co-founder) Vinod Khosla warned entrepreneurs against the dangers of hype:

"During his TechCrunch Disrupt talk, Khosla explained that the key role of early investors is not funding, but personal attention and guidance. But generating buzz too early can inflate a startup’s market cap and make them a less lucrative investment of time and money for the top-tier advisors they need. That leads to critical missteps like poor hiring decisions that can doom a startup."

Hype has its place, but it is possible to have too much of a good thing.

The only ways hype helps is to a) raise money b) attract customers c) recruit employees. Before you stir up hype, make sure you know how it's going to help you with those three things. Because hype carries a lot of downside as well.

To paraphrase Peter Parker's Uncle Ben, "With unrealistic valuations come unrealistic expectations." The poster child here is Color, which was lambasted solely because of the amount of money it raised.

During the dot-com boom, fashion startup was similarly raked over the coals for raising (and squandering) $135 million.

I get a lot of entrepreneurs who want me to help them stir up hype. I always refuse to help them until they can explain exactly what they hope to accomplish with press. Far too often, people pursue hype for hype's sake.

Like dynamite, hype is a powerful tool. It can also blow your hand off. Use it wisely.

Monday, October 29, 2012

The real reason we wrongly worship workaholics

I hate it when the press worships workaholism.

The latest example is this Business Insider piece titled, "16 People Who Worked Incredibly Hard To Succeed.":

The article is filled with glowing praise for people who seem to spend all their waking hours working. Here are just a few of the headlines:

"Starbucks CEO Howard Schultz continues to work from home even after putting in 13 hour days."

"GE CEO Jeffrey Immelt spent 24 years putting in hundred hour weeks."

"Apple CEO Tim Cook routinely begins emailing employees at 4:30 in the morning...He used to hold staff meetings on Sunday night in order to prepare for Monday."

The message seems to be that the rich and successful got that way by working insanely long hours.

In a nutshell, this is insane. I used to believe this. In fact, I even wrote a blog post about this in 2006:

I'd had dinner with Ray Lane of KPCB, who acknowledged that he'd been a bad husband and father...and said he do it all over, because it helped him succeed.

Yet all the science now suggests that these insane levels of overwork are counterproductive.

Effort alone doesn't produce greatness; deliberate practice does, and it can only be practiced for about 4 hours per day:

Meanwhile, studies have shown for decades that sleeping less than 8 hours per night produces sleep deprivation, which is the equivalent of being legally drunk:

Meanwhile, Jim Loehr and Tony Schwartz's work on full engagement suggests that alternating brief bursts of intense work and recovery time better manages your energy levels and drives better results:

So why do we still worship workaholics? I think it boils down to our ambiguous relationship with success.

Attributing success to a punishing work schedule supports several beliefs:

1) It helps justify the disproportionate wealth that accrues to the successful--after all, they worked hard for that money, right? (Never mind that we never see pieces about immigrants working 2 jobs to support a family)

2) It gives us a built-in excuse to explain our own lack of success. We could be successful--if we were willing to work like a maniac. But it's just not worth it.

I appreciate hard work; I wrote the first draft of this post at 11:15 on a Friday night! But we'd be better off if the press focused on people who are successful at their career and in their broader life.