Friday, May 24, 2013

BetaBeat's "The Pitch" web series is smart marketing that should cloned for Silicon Valley

I've really been enjoying the pitch videos that BetaBeat has made available as part of its "The Pitch" webisodes.

From what I can tell, "The Pitch" applies the classic webisode model (short <5 a="" br="" case="" episodes="" fedex="" fundraising="" in="" major="" minute="" new="" process="" sponsor--in="" the="" this="" to="" vc="" york.="">
I just watched a video that showed the founders of Silver Living, a super-Yelp for retirement homes, pitch to Steve Schlafman of Lerer and Nikhil Kalghatgi of Softbank:
Watch thevideo

The video is highly professional and tightly edited, and gives you a great sense of the founders and the business. It even includes dramatic tension, as it becomes apparent that the founders haven't thought enough about virality (though other than that, they came across as smart and well-prepared).

Interestingly enough, FedEx's participation appears limited to a preroll ad; it's not intrusive, nor is there awkward product placement as I would have feared.

I would love to see someone do something similar here in Silicon Valley. These 5-minute pitch videos would be an awesome addition to Angel List profiles, for example.

And if FedEx wants to pay me to be one of the investor stars, that wouldn't be too bad either!

Consumer loyalty comes from listening, not lock-in

Here in Silicon Valley, we love to focus on "sustainable competitive advantage."  We talk of moats, barriers to entry, and lock-in.  If a product is "addictive," that's considered a good thing.  The highest praise is to be compared with crack cocaine.

It's not a pretty picture.

I would argue that loyalty comes from listening, not lock-in.  I was struck by this recent post, which cited the ideas of political theorist Albert Hirschman:
"Against the backdrop of civil strife and war in the late 1960s, Hirschman wrote that when faced with declining institutions, consumers have two choices: Exit and go elsewhere with their support or dollars, or use the power of voice to generate change from within. These two choices are mediated, he explains, by members' loyalty to the institution. Loyalty makes people more likely to stay and work for change from inside. But loyalty is also a product of how effective a consumer's voice is likely to be; it does not stem from feeling locked-in or having no possibility of exit."
I've experienced the power of loyalty in my own startup life.  Time and time again, I found that my willingness to engage my users/customers and listen and act on their concerns produced much greater loyalty than strictly cost/benefit analysis would dictate.  This includes loyal TargetFirst users like Mike Feury, early Ustream broadcasters who helped us shape the service, as well as the businesspeople who first began helping us transform a simple consumer wiki service called PBwiki into an enterprise-grade service called PBworks,

Just today, I saw a story about how 94% of teens use Facebook, but the majority of those users dislike the service.

Are those teens loyal to Facebook?  They might be locked-in, but they're definitely not loyal.

As you build your own base of users for your startup, make sure you spare some time for really listening, rather than simply trying to engineer lock-in.

The Lesson of Tumblr: Product Uber Alles

The best coverage I've read about Yahoo's massive acquisition of Tumblr comes from Tumblr co-founder Marco Arment (who went on to create Instapaper):
"Intense focus requires neglecting almost everything else. David’s focus on pushing the product forward meant that he didn’t want to think about boring stuff: support, scaling, paperwork, and money. Every time we’d get close to needing more funding, I’d try to convince David to hold out a bit longer or try to become profitable, and he’d convince me that everyone was better off if we’d focus on the product instead. And every time, he was right."
Many of the entrepreneurs I work with are probably tired of my constant emphasis on product and its flipside, traction.  It's probably pretty boring to hear the same questions over and over: "How much are customers using the product?  What evidence do we have that we've got traction in the market?"  But just because it's boring, doesn't mean it's unimportant.

For startups, product is all-important.  This doesn't mean that the actual blocking and tackling are meaningless--the #1 job of a CEO is to avoid running out of money.  But the best way to get money is to demonstrate traction.  And the best way to get traction is to build an awesome product.

Tumblr is the uber-example of this principle.  By all accounts, Tumblr founder/CEO David Karp didn't give a damn about monetization.  He avoided advertising of all kinds because it would worsen the user experience.  Yet Yahoo! paid $1.1 billion for his company.  Why?  Because his product was a) beloved, and b) widely used.  Tumblr claims to have 300 million users.  You can get away without figuring out your long-term business model if you have 300 million users!

Build a startup that produces a great product.  The ultimate goal is to build a great business, but it's almost impossible to build a great business around a mediocre product.

Social media and the apotheosis of opinion

As I browse both social media and traditional media, I, like many others, get the definite impression that opinions are both more divergent and strongly held than ever.

If television produced the soundbite world, social media has made the soundbite seem like a Montaigne essay.

This struck me when I read about a recent New York Times Op Ed:

(Note that I didn't actually read the Op Ed; I avoid the NYTimes because of the paywall.  I want to save my free articles for when I really really need it.  How's that working for you, NYTimes?)
"There seems to be a widespread presumption that writing is prescriptive (or proscriptive) rather than simply observational or meditative.  Confident authority is an appropriate tone for straight reportage, but it’s become the default of columnists, essayists and bloggers, one that’s so reflexive that some of them seem to forget it’s a pose. To some extent this is a deformative effect of the space restrictions within which most of us work; in a thousand-word essay you can’t include every qualification or second thought that occurs to you or you’d expend your allotted space refuting your own argument instead of making it."
Substitute "140 characters" for "1,000 word essay," and you'll get a sense of the scale of the problem.

A second order issue is the feedback/reward mechanism associated with social media.  Each comment, reply or retweet is another hit of sweet, sweet dopamine.  Yet what I found is that I rarely got a lot of comments on carefully reasoned posts.  When I asked my readers why, they said that when I presented a clear, cogent, and reasonable argument, people didn't feel like they had anything to add.  On the other hand, a controversial opinion provides plenty of opportunities for support and rebuttal.

Sadly, I don't have any solutions to these problems.  All I can do is alert you to the issue and hope that being forewarned helps make you forearmed.

When you sell your startup, you can't expect to retain "ownership"

The venerable Dave Winer (a guy I respect a lot) recently wrote about Marissa Mayer and Yahoo's acquisition of Tumblr.  I don't have a lot of insights to add about that deal, but I did want to comment on what Dave had to say about selling your company in general:
"All this is to say that the promises execs make on acquisitions are meaningless. They own the thing, they will do what they want to with it. It doesn't matter how many nice sounds Mayer makes on the deal. At the core she cares not one bit what the users of Tumblr think. She's saying what she needs to say to make the deal happen.

I have some intuition about this myself, because I sold a company. We were bought because we had a presence in the Mac market, which was highly coveted at the time. I negotiated for myself a role as the "Chief Architect of Symantec's Mac strategy." A few weeks after the deal I made a presentation to the exec staff about what our Mac strategy would be. Only one person showed up, the president of the company, Gordon Eubanks. He watched a couple of slides and thanked me for the input. I asked What about my chief architect role? He told me that was something they told me to get me to do the deal.

He left the room. What was I going to do? What could I do? Nothing, that's what. :-)

Moral of the story: When you sell your company, no matter what promises were made, you sold it. It's theirs now. They will do what they want to with it. Promises don't matter."
In my experience, Dave is 100% correct.  Just think of all the companies that the Yahoos and Google of the world have bought and killed.  It's happened to some of my investments as well.

I don't begrudge my founders the opportunity to make a ton of money.  I'm as greedy as the next guy.  But you need to recognize that the only way to retain real "ownership" over the business (not just a financial interest) is to stay independent.

Until the deal closes, you're being recruited.  But once you sign, you lose all your leverage.  Keep that in mind when you're negotiating to sell your company.

Mental toughness at your startup

Bill Belichek is one of the most successful American football coaches of all time.  After helping the New York Giants win two Superbowls as an assistant coach, he led the New England Patriots to three more Superbowl victories (along with two other appearances in the big game).

Along the way, Belichek has become famous for his systematic, hard-nosed approach to coaching football, including a willingess to cut or trade high-priced veterans when he no longer felt that they were worth their salary.

That's why it's interesting that he focuses on mental toughness and togetherness as the source of his success:
"We use the term ‘mental toughness’ a lot, and to me that term means doing the right thing for the team when things aren’t right for you — maybe a guy that’s not getting the playing time he hoped for, maybe he isn’t getting as many opportunities to do whatever it is he’d like to do. We all have to give up a little bit of something in this sport, and mental toughness is going out there and doing what’s best for the team even though everything isn’t going exactly the way you want it to. The way we try to handle that, or manage it, is that your individual performance is critical for us to win, and your mental toughness is doing what’s best for the team in every situation. So being solid and doing your job, and if you’re prepared and everybody around you knows that you are prepared and they can count on you, and you’re dependable to go out and do your job, then it makes it a lot easier for the person beside you to go out and do theirs."
There are some interesting lessons for the startup world.  Belichek asks his players to sacrifice their own individual desires for the good of the team--despite the fact that he makes no bones about his lack of sentimentality and traditional "loyalty".  In the startup world, entrepreneurs face a similar challenge--how do you get people to sacrifice when they have so many other opportunities?

Belichek's answer is to focus on team achievement.  His message is that individual sacrifice leads to greater team success--a tradeoff that is credible because of his 5 Superbowl rings.

If your startup is killing it, its employees can expect to benefit (think of the credibility we still grant to ex-Googlers, even though most of them joined the company much later, and played little role in its initial success).  If your startup is failing, asking for loyalty and self-sacrifice is a fool's errand.

Wednesday, May 22, 2013

Tours of Duty: The Employer-Employee Compact

I'm delighted to share that I just had my very first article appear in Harvard Business Review.  I can't take much credit for it; it helps that my co-authors, ReidHoffman and Ben Casnocha are a world-famous billionaire and New York Times-bestselling author respectively.  But I still think it's pretty cool.

Thanks to all you loyal readers out there!

Tuesday, May 21, 2013

Politics shouldn't be a dirty word at your startup

My friend Ben Casnocha recently published a post about status and power:

It's a good post, but what really struck me was one of the comments.  The commenter wrote:
"Sorry, I have to unsubscribe after reading this… Manipulation, office politics–whatever you want to call it, I don’t like it if it interferes with getting work done. Too many lives are wasted to preserve someone else’s ego. I left my regular job and started working for myself full-time in part because of this nonsense. Everyone should treat everyone else with respect but this does not need to be a game."
While this is a common feeling, it's also hopelessly naive.  There's a school of thought, especially prevalent among young technical founders, that "politics" is a bunch of BS that keeps you from getting work done.

It is true that internal politics can be an enormous waste of time and effort.  I've done consulting work for Fortune 500 companies where senior managers spent an entire 2 hour meeting making decisions without ever citing an actual customer!

But it's also true that things like building relationships and doing the work behind the scenes to generate consensus can help your startup achieve its goals.

In the end, politics is simply the art of influencing people.  While it can be abused, it's a tool that every entrepreneur should have in his or her toolkit.

It's the entrepreneur's responsibility to get people to do what they need to do

A lot of folks seem to have this notion that if they do what they're "supposed" to do, that's good enough.

That might be true in a big company, but it's definitely not true in a startup. The employees of a startup need to focus on achieving goals, not simply fulfilling roles.

This is even more true for entrepreneurs. It's the entrepreneur's responsibility to get people to do what they need to do.

I've heard entrepreneurs complaining about their employees. I call this the "imperfect tools" syndrome. Much like a hobbyist who insists that he/she would become more productive and produce better results if their tools were better, these entrepreneurs decry the imperfections in their team.


You're the entrepreneur. It's your responsibility to do whatever is necessary to make the company successful.

It's hypocritical to reap the lion's share of credit and financial rewards in the event of success, but blame failure on others.

Moreover, saying that you did what you were "supposed" to do and that the lack of results was someone else's fault is lazy self-victimization.

Engineers blame Sales and Marketing for not selling. Sales and Marketing blame Engineering for not building a better product. Everyone blames the founder for not devising a better strategy. Guess what, folks--no one cares. All that matters is that you fail. And if you fail, you fail together.

If people don't get it the first time, try again. Try saying it differently. Try being more prepared. Try letting people speak their mind. Try anything, but remember, it's your responsibility.

Monday, May 20, 2013

Affirmative action is good, but it's also a cover for racial discrimination

Affirmative action is a highly controversial subject.  Its supporters and opponents are dead set in their positions, and it's nearly impossible to have a productive conversation about the topic.  Naturally, I'd like to add my two cents.

I hadn't thought about affirmative action for a long time.  Obviously, it might have affected me when I was applying to college at the beginning of the 90s, but since I ended up getting admitted to Stanford, my first choice school, I never really paid it much attention.

A week or two ago, I ran across a Priceonomics blog post that asked, "Do Elite Colleges Discriminate Against Asians?"  A study by Princeton professor Thomas Espenshade and his collaborator Alexandria Radford looked at the topic using 1997 college admissions data and concluded that they did.  Among other things, Espenshade and Radford found that:
  • For any given SAT score, Asian students have the lowest chance of being accepted
  • Based on a statistical model, Asian applicants have 67% lower odds of admission than white applicants with comparable test scores
  • Being Asian is the equivalent of a 140-point handicap on the SAT (based on the old 1600 point scale) in comparison to white student.  In contrast, Hispanic students got the equivalent of a 130-point bonus, while African-American students got a 310-point bonus
This data shows historical discrimination, but what about today?  Ron Unz, the founder of The American Conservative, compared admissions rates for Asians at the Ivy League colleges versus Caltech, an elite science and engineering institution that practices race-blind admissions.

In 1990, the Ivys had an Asian enrollment percentage between 7% (Dartmouth) and 17% (Yale).  Caltech was at 22%.  Fast-forward to 2011, and the numbers had radically diverged.  Caltech was now at 39%, while the Ivys were in a tight cluster between 13-18%.  Caltech admitted more than twice as many Asian students as any Ivy League university.

Many Asian Americans see this discrimination and blame affirmative action.  But they're wrong to do so.  Affirmative action doesn't cause discrimination against Asians.  Rather, affirmative action is the fig leaf used to justify anti-Asian discrimination in favor of whites.

In 1997, the University of California system was forced to abandon affirmative action because of Prop 209.  Here's what happened:

Here is a table, broken down by race and ethnicity, of the admission of California residents to the University of California from 1997 through 2007. (HatTip to Ed Chin) It shows that in 1997, the last freshman class admitted before the elimination of racial preferences by Prop. 209 in 1996, 18.6% of the admitted freshmen were “underrepresented minorities.” 3.8% of the admitted freshmen were black.

In the freshman class of 2007, “underrepresented minorities” made up 22.9% of those offered admission, and 3.6% were black.
In other words, even after the end of affirmative action, the proportion of underrepresented minorities actually increased.  The proportion of Asians also increased (there's a reason that UCLA's nickname is "University of Caucasians Lost among Asians").  The only group that saw a decrease was the white student population.

Here's my opinion:

Affirmative action, in the abstract, is a good thing.  While it may seem unfair to qualified white students to lose their place at certain colleges to underrepresented minorities, I'm sure that nearly 100% of those minority students would trade in their preference for a life free of racial discrimination against them.

It's not a perfect tool; one of the problems was that simply admitting underrepresented minorities without provide extra help mean that many failed to earn their degrees.  In fact, the end of affirmative action actually coincided with improved graduation rates for minorities.  On the other hand, if we so often tout college education as the key to a better life, it seems like rank hypocrisy to tell people that the same problems they're trying to escape by going to college are going to prevent them from getting admitted.

The danger with affirmative action is that it is implemented in an opaque and easily abused way.  Essentially, admissions offices can do whatever they want, so long as they don't set quotas.  Yet eliminating quotas actually makes the process less fair.  A quota is clear and something that can be discussed.  If a university sets an upper limit on minority students, at least it's being honest, and its policies can be debated based on evidence.  The same holds true for an explicity SAT penalty or bonus.

This kind of explicit discrimination would make the absurdity of anti-Asian discrimination more obvious.  No university admissions officer would say, "We're going to set a quota on the Asian kids because too many of them do well in school, and we want to make sure we keep their numbers down," yet that is exactly what they're doing.  It hardly seems possible that the Ivys would cluster so tightly in the 13-18% range without some kind of collusion.  Similarly, saying "We're going to penalize the Asian kids 140 points on the SAT" would be tantamount to admitting, "Those Asians do better on all the tests, the same tests we use to predict college success.  So we'll change the goalposts on them."

Moreover, portraying this discrimination as part of affirmative action directs Asian anger at Hispanics and African-Americans--even though those minorities are not the ones setting the policy or taking up most of the admissions slots.  Intentional or not, it is diabolical.

On a personal level, I'm going to start needing to think about this issue again in less than a decade.  I have two kids who will be in college by then.  When they apply, how should they categorize themselves on their applications?  They are half-Chinese, and half-Puerto Rican.  Does that make them Asian or Hispanic?  Are they attractive to Ivy League universities, or undesirables that need to be screened out?  What about my nephew, who is half-Caucasian and half-Puerto Rican?

There aren't any easy answers.  But finding the answers will be easier if universities are honest about the true nature of their policies.

Sunday, May 19, 2013

You're not "awesome," you're "awesome at"

Here in Silicon Valley, we like to throw around words like "awesome," "killer," "kickass," and "rockstar."  In fact, we've even made "rockstar" into an all-purpose adjective, as in "rockstar developer" or "rockstar salesperson."

(Can it be long before we start using "rockstar" as a verb?  As in, "I really rockstarred that latest release!"  Ugh.)

Lost in all this enthusiasm is the realization that people aren't "awesome," they're "awesome at."

"Awesome at" does two things--it clarifies just what a person excels in, and it sets a clear boundary on that excellence.

History is rife with examples of "awesome" causing disasters which the application of "awesome at" could have prevented.  Think of all the unsuccessful second startups of famed entrepreneurs--being awesome at building one type of company (free email) doesn't mean you're awesome at building a completely different type (e-commerce).

There are two ways you can use this insight.  First, when someone tells you that they or someone they know are "awesome," ask, "What are the specific things that this person is awesome at?"

Second, take a deep look at your own situation.  I'm sure you're awesome, but have you defined what you're really awesome at?

I'm lucky, in that my wife sees it as her job to make sure she reminds of all the things I'm not awesome at.  It may not be great for my ego, but my ego isn't my chief concern.  Knowing what I'm not awesome at helps me figure out where I actually do excel.

What startup entrepreneurs can learn from writer's workshops

One of my undergraduate majors at Stanford was Creative Writing.  This meant that I sat in many different writing workshops.  For those who haven't taken a creative writing course before, here are the basics:

1. The workshop consists of a small group (~12) of students.

2. Each class session focuses on workshopping one of the writers' work.

3. Prior to their workshop, the writer submits the story to the rest of the workshop.  Everyone reads the story in advance. (To give you some idea of how old I am, every time I workshopped a story, I had to print it out, take it to the copy center in the student union, and pay to have 12 copies made.  I then physically distributed my story the session before it was to be workshopped)

4. During the workshop, the writer reads the entire story aloud.  Then the class members discuss the story and offer their feedback.  In my experience, both processes are excruciating.  A story is a very personal thing, and it's hard not to feel defensive about your work.

5. At the end of the workshop, the rest of the class returns the paper copy you gave them, complete with their individual notes and feedback.

In the years since, I've come to realize that this is a great metaphor for entrepreneurship.  Your company is a very personal endeavor which you present to a whole bunch of strangers, who then give you blunt feedback.  The only part that's missing is the part where you then hand your notes on *their* stories to the VCs.

I've drawn three key lessons which I use in the startup world:

1) You have to develop a thick skin and stop taking criticism of your startup personally--it's simply part of the process.

2) You have to develop the judgment to know when to accept and when to reject suggestions.  It's far too common for entrepreneurs to lurch back and forth based on the latest feedback; the writing workshop concentrates all the feedback into one session, which means you have to exercise that judgment.

3) The workshop doesn't make or break your story; it's simply a tool to improve it.  The real work is done beforehand (as you write the story) and afterwards (as you rewrite it).  Similarly, pitching to investors is a means, not an end.  Fundraising is necessary but not sufficient.

Be a subversive, not a rebel

As an entrepreneur, try to be a subversive, not a rebel.

Here's how I differentiate between the two:

1) A rebel breaks the rules because he or she hates being told what to do.  A rebel's defiance is open, and being identified as a rebel is a feature, not a bug.

2) A subversive breaks the rules because he or she is trying to accomplish a goal, and breaking the rules is the best way to accomplish that goal.  A subversive's defiance may be secret or open, depending on which is most likely to help accomplish the desired goal.

Subversion is rebellion with subtlety and purpose.

Napster was about rebellion--it was clearly illegal and the company didn't bother concealing it.

Pandora was about subversion--finding a loophole around streaming royalty rules.

Rebellion can change the world, but it often flames out.  Subversion is subtler, but has a higher chance of success.

(This post inspired in part by a conversation with Martin Bogomolni)

The relationship between humility and realism

I write a lot about the value of humility, especially in the startup world, but I realized that I needed to add some clarification.

Humility is an important trait, but it needs to be paired with realism.

Humility isn't just self-deprecation.  Think of all the times some gorgeous supermodel says things like, "I don't know why people think I'm pretty.  I'm just a regular gal."  We resent this kind of humility because it seems so obviously divorced from reality.

A supermodel who has spent years on the runway is a trained, cold-blooded professional.  She wouldn't be able to stay on top if she wasn't aware of her physical assets, and didn't work hard to maintain or even enhance them.  Claiming that she doesn't consider herself beautiful seems disingenuous, and makes us feel like we're being treated like a moron.

Similarly, if someone like the late Steve Jobs were to say something like, "I have no idea why my products are successful.  I'm just lucky, I guess!" we would justifiably want to punch him in the face.

There are things I know I'm good at.  I can write faster than just about anyone I know (as you can tell by my prolific output).  I don't say things like, "Oh, it just comes out of me.  I don't think it's anything special."  Instead, I say things like, "I work really hard at my writing, and I've been doing so since I was 12."

It ain't bragging if it's true.

The corollary is that it ain't humble if it's obviously false.

Just be realistic about your situation, whether it's your startup, your skills, or your impact on the world.  As long as you're realistic, you'll probably seem humble in comparison to the BS artists around you!

The value of the "locker room guy" for your startup

In the NBA, one of the explicit roles that a player can play on a team is as a "locker room guy."  The term is usually applied to a well-respected veteran who, despite declining athleticism, remains valuable to his team because he settles down the younger players, sets a good example of professionalism, and helps lubricate the social functioning the "locker room" (e.g. the relationships between the various players.)

One classic locker room guy who is still playing in the NBA Playoffs right now is Juwan Howard.  Howard is 40 years old, and simply isn't a very good NBA player anymore (and hasn't been for a number of years).  In his youth, he was a key member of the "Fab Five" at the University of Michigan, and even made the NBA All-Star team in 1996.  In his career, he's earned over $150,000,000.

This season, Howard has played in just 7 games, scoring a total of 21 points.  That's a good quarter total for his teammate, NBA MVP LeBron James.  Yet Howard remains a respected teammate who plays a critical role in helping the Heat successfully integrate volatile players such as the much-arrested "Birdman," Chris Andersen.

The NBA might worship youth more than even Silicon Valley; players like LeBron are national figures by the time they're 16 years old.  Yet the NBA still understands--and pays for--its locker room guys.  Howard hasn't started more than half his team's games since 2006; yet during that time, he's earned about $30 million warming NBA benches.

If anything, your startup needs a "locker room guy" (or gal) more than any NBA team.  NBA teams play 82 regular season games which last about 2-3 hours each.  Your startup team is together practically 24/7 for years on end.  NBA players are under contract, and can't quit unless they retire from the game.  Your employees can leave at any time.

As I've gotten older, I've worked hard to build up my skills as a "locker room guy."  Maybe that means taking the time to listen when people have complaints.  Maybe that means strolling over to de-fuse the situation when you hear two people arguing over the same thing for the nth time.  Maybe it's simply making people feel reassured and appreciated.

Take a look around your startup, and see if you can identify your "locker room guys" (or gals).  Then hang on to them.  Not all value can be measured by lines of code or deals won.

Nice guys finish first *and* last

If you're not reading Eric Barker's blog, Bakadesuyo, take a moment to subscribe (at least for as long as RSS readers still exist) before reading the rest of this post.  Eric spends an incredible amount of effort distilling the nuggets of wisdom from hundreds of books so you don't have to.  You'll thank me later.

Done?  Good.

One of Eric's recent posts tackled the old saying, "Nice guys finish last," by looking at the actual research. (As an aside, the saying is actually a misquote of legendary baseball manager Leo "The Lip" Durocher, but the misquote is true to the spirit of his words):

You should read the entire piece (it's not that long), but here is the gist:
  1. Disagreeable people earn more than agreeable people
  2. Ethical character is negatively correlated with men's wages (at least for b-school students!)
  3. Disagreeable people have higher credit scores
  4. Manipulative arrogant men were more sexually active and had more sex partners
  5. Narcissists are more likely to be hired, promoted, and given raises
  6. Anger conveys competence
  7. Warmth and competence are seen as inversely related
Wow, that's pretty grim.  Is there any hope for the nice guys of the world? 
  1. Conscientiousness is the trait most broadly correlated with marital satisfaction
  2. The U.S. Navy's best commanders are openly encouraging, doing better on evaluations than negative, aloof captains.
  3. Nice guys have higher quality friendships, are better parents, have better academic and career performance, as well as better health
  4. Generous people make up a disproportionate number of the people at the bottom *and top* across various industries.  In other words, being nice helps you succeed, unless you're a doormat.
In other words, nice people are better for the world.  But if they take it too far and become doormats, they suffer the consequences.

The broader pattern I see is that niceness is the better long-term strategy for both you and the world, but that meanness can drive short-term results for you ("Chainsaw" Al Dunlap, anyone?), albeit the cost of making the world worse off.

Finally, I'll note that while this information is great, you still need to be who you are. I've been in situations where the people around me wanted someone to yell at and abuse them.  That was how they were motivated.  Rather than figure out how to tap my inner psychopath, I decided to get out of the situation.

In other words, if you're a nice guy, don't try to become mean (no matter how horny you are!). Just don't be a doormat.

Reading a lesson doesn't mean you've learned it

One of the key things I encourage every entrepreneur to do is to develop a healthy sense of humility.

Many entrepreneurs (especially those of the brash, young, cocky variety) drip with self-confidence.  That's a good thing.  You need some irrational confidence to pursue a profession with a 99% failure rate in which you take on the world's biggest and most powerful companies on a shoestring budget.

But being self-confident doesn't mean being deluded.  That's why it's a good thing so many people in the startup world read things like Dan Ariely's "Predictably Irrational."  Or is it?

A recent guest post on Scientific American argues that a shallow reading can actually cause problems by generating unjustified confidence:
"Although we intuitively believe that we correct for biases after being exposed to them, it is impossible to truly accomplish this until we consider how the bias blind spot – the bias within the bias – distorts thinking. The ironic implication is that these books are perhaps part of the problem. The common sendoff, “now that you know about these biases, perhaps you’ll decide better,” instills a false confidence – it’s the trick we’re all failing to notice.
I first noticed this after learning about confirmation bias, overconfident bias and above-average-effects and concluding, dubiously, that I was a genius living in a world of idiots. Of course, the joke was on me, and it took many years to figure that out."
 Think your confidence is justified?  Okay, consider this line of reasoning.

1) Venture capitalists are smart people. (Most have advanced degrees, and are financially successful)

2) Venture capitalists know that spending 1 hour per month in a board meeting doesn't qualify them to run the business.

3) Venture capitalists enjoy books like "Predictably Irrational" and attending TED and other such conferences. (Entrepreneurs probably would too, but don't have the money)

Yet despite all this, many VCs still proffer advice to entrepreneurs as if they were handing tablets down to Moses.*

Don't get cocky, just because you've read a few books.  We're all dumber than we think, and developing an appropriate sense of humility can be very profitable in the long run.

* It is possible that VCs do have a subconscious realization of their limitations--after all, how many do you see leaving their partnerships to start companies?  If they really were that much better at building startups than the average entrepreneur, they could make a lot more money doing that than simply investing in flawed entrepreneurs!

Is Microsoft doomed? I'll let you know when Windows 10 comes out.

A lot of folks believe that the Microsoft empire is doomed, and that the rise of touchscreen computing and mobile devices will lead it its inevitable downfall.

This may very well be true; it certainly is true that to date, Microsoft's attempts to enter the touch and mobile markets have been poorly received.

Yet much of the time, the smart folks have it wrong.

In the 1980s, Apple's Macintosh product introduced the graphical user interface (GUI).  It was light years ahead of Microsoft's DOS, and Apple's brilliant founder, Steve Jobs, openly sneered at Microsoft's crappy software.

Microsoft tried to catch up by introducing Windows.  It was a failure.

Microsoft brought out a second version of Windows.  It was also a failure.

Finally, Microsoft brought out Windows 3.1.  It was still a crappy knockoff of the MacOS, but it was executed well enough to be a major upgrade over DOS.

The rest is history.

In the 1990s, Netscape's Navigator introduced the commercial Web browser.  Everyone agreed that the Web would change everything, and doom desktop software.

Microsoft tried to catch up by releasing Internet Explorer.  It was a failure.

Microsoft brought out a second version of IE.  It was also a failure.

Finally, Microsoft brought out IE3.  It was still a crappy knockoff of Netscape, but it was executed well enough so that people didn't really care.

The rest is history.

My point is that it's very easy to write off Microsoft.  It's never been a cool company.  Here in Silicon Valley, it's the closest thing we ever had to an Evil Empire.

But Microsoft has vast resources, and armies of smart people.  Even today, when it is supposedly in its death throes, it has double the staff, revenues, and profits of Google.

And it has a history of bumbling its way to "good enough" when tackling new markets.  Bill Gates may yet have the last laugh.

Sometimes, your startup can't overcome "Original Sin"

I was touched recently by the sad tale of a failing entrepreneur I found on Hacker News.  Here is his cry for help:

"I believe in our product, but I don't believe in our business model.
When asked by friends doing "normal" jobs what it's like running a startup (my first one, mind you), I respond half-jokingly that every day is either the best or worst day of my life, that I've experienced the highest highs and lowest lows of my short career. I've learned more in the last year than I have at any other point in my life, and I've become a better programmer and designer. I've always said that even if this doesn't work out, I'll have become a better, more capable professional in the end. And I feel that I have. But I still feel like shit.
I think my co-founders are idiots, that they fouled up their side of the deal, but I feel as though I've invested too much time and energy to bail now."
Lost in our startup culture's enthusiasm for "rapid prototyping" and "pivots" is the fact that sometimes, your startup can't overcome "Original Sin."

It might be a sin of business model, founding team, or technology choice, but it really doesn't matter.  What does matter is that it's almost impossible to overcome.

Friendster was the first major social networking success story, but failed because it's choice of Java architecture made it unscalable.

More recently, Color had a wildly successful founder and tons of VC backing, but no real business model.

Failure sucks.  If failing doesn't make you feel bad, I don't want to invest in you.  In sports, we frown on players who cheerfully sing in the shower after losses, and are firming up social plans while the game is still in doubt.  The same applies in the startup world.

But the best way to deal from failure is to accept it, learn from it, and move on--not to keep denying it.  This isn't to say the anonymous entrepreneur above should simply quit immediately, but he should make it clear to his co-founders that this isn't working out, and set up a plan to extricate himself.