Saturday, June 08, 2013

Do something every day towards your three big priorities

Focus, focus, focus.

Focus is the key to startup success.  You have fewer resources than established companies.  Your only path to success is to focus those limited resources in a tightly-defined problem space, so that your concentrated effort burns the hapless ant of success.

Easier said than done, right?  I have a very simple system to maintain my focus.  It should work for you as well.

1) Flip over one of your business cards.

2) Write down your three biggest priorities, in phrases of three words or less.

3) Stick the business card in a place you'll see it every time you look up from your computer screen.

4) Any time you catch yourself wondering what to do, look at that business card.

If you do this, you'll end up doing something every day towards each of your three big priorities, which is the first step to success.

So much of what we accomplish in this world depends on the slow accumulation of progress.  Often, success can't be rushed.  So make sure you're making steady progress.

Stop lying to yourself

When I was a kid, I studied the violin. (I know, quite a shocker for a Chinese-American kid growing up in the 1980s)

My violin teacher made me keep a practice log.  I was supposed to practice for 30 minutes per day.  For each 30 minutes I practiced, I got a token which let me move a felt cloth horse outline around a cardboard track.  If/when I reached the end, I would get some nominal prize.

I "practiced" for 30 minutes every day.  Here's how my practice worked.

1) I would start practice at 8 PM.  That meant that I would look at the clock at 8 PM and note that I had started practice.  At that point, I would go get my violin, rosin up the bow, dig out my music books, set up my music stand, and perhaps get a drink of water--so I wouldn't get thirsty in the middle.

2) When I actually put bow to strings at around 8:10 PM, I would practice while watching the television.  If something exciting happened on-screen, I found myself pausing--just for a few moments, of course.

3) At 8:15 PM, I would take a break to use the restroom.  Darn that pre-practice water!

4) At 8:20 PM, I'd resume my practicing.

5) At 8:21 PM, I'd start packing up my stuff.

6) At 8:26 PM, I'd finish putting away my stuff and round up to 30 minutes.  There, that wasn't so hard!

I was actually practicing about 6 minutes per day, but I was lying to myself--quite convincingly--and believed that I was practicing my 30 minutes per day.

Of course, I got my prize.  What I didn't get was any increased skill at playing the violin!

You might have your own equivalent of "violin practice" in your life.  Are you really pursuing it with 100% of your energy and focus?  Are you really putting in your 30 minutes, or are you fiddling around (figuratively--literally is what you're supposed to be doing!) for most of it?

I didn't really want to get better, so my self-deception didn't hurt my life too much.  But if you're an entrepreneur, stop lying to yourself.  Take a blunt look at how well you live up to your goals.  If you're technically meeting them, but failing to make real progress, your startup is what loses out.

How To Be A Visionary (and not drive yourself crazy)

"It's so hard/To say goodbye/To yesterday." (Boyz II Men)

We sure do love our visionaries here in the startup world.  Visionary companies, visionary founders, visionary investors...every year, SVForum hands out its Visionary Awards to the pioneers of the Valley.

Yet being a visionary is one of the easiest ways to drive yourself crazy.

By nature, a vision is of the future.  If your vision comes true, you're hailed as a visionary.  If your vision doesn't come true, you're either a dreamer or a fool.  Either way, you're fired.

It's very easy to get attached to your visions.  They're so beautiful, and seem so real.  Plus, if they come true, you usually end up becoming rich and famous.

The problem is, reality has a nasty habit of puncturing our visions.  Most of us react by desperately slapping on new patches and blowing as hard as we can to keep our original visions inflated.

Having visions is risky and uncertain.  It's painful to be wrong.  It's especially painful to be wrong if everyone else thought you were right for a long time, and praised you for it.  Just ask Andrew Mason.

But the world needs visionaries.  Without a vision of the future, it's difficult to change the world.

The key to being a visionary is understanding the relationship between vision and reality.  You want your vision to come true, but reality has the final word.  Therefore, you must tether your visions to reality, and be ready to change them if reality invalidates your original vision.

This requires courage, because the world is often harsh to those who change their minds.  But you can make this easier by being humble about your prognostication abilities to start with.  When people call you a visionary, respond by acknowledging the unknowability of the future.  Offer your vision as a possibility, not a guarantee.

In the end, reality rules.  It may rock, or it may bite, but if your vision comes true, good things will happen, even if you took some heat along the way.  If your vision doesn't come true, no amount of spin will allow you to declare victory.

(Inspired by my friend Lindsey Mead Russell's post:

To succeed, focus on something other than "rightness"

This Facebook post by Facebook developer Ryan Patterson got a lot of attention; as of the writing of this post, it had 734 Likes (thanks to an appearance on the front page of Hacker News):

It is a sincere and well-written post.  But I want to address what I perceive could be a dangerous misunderstanding of its thrust:
"Agency is the capacity for a person to act in the world. As a hacker, having agency over your world is critical to fully explore the boundaries of problems and find how to best leverage your solutions.

At a higher level, take ownership over the entire company. Don't let your coworkers be less than the best that they can be. Understand the trade-offs being made and the factors that led to them; understand temporary solutions and the priorities that necessitate them, but don't accept a decision that you feel is wrong without raising the issue and getting a better understanding. This is your company (your garden) and if you let people pull in the wrong direction the entire plan will fall into disarray. Make sure that you encourage changes and that you're confident that the changes happening are the right ones.

It's easy to fall into the mindset that you don't know everything, everyone around you is smarter and more experienced, and that if you say something incorrect you'll be judged by your peers. This isn't the case. When you have an idea, share it with your team, even if you aren't confident it's the right idea. Wrong ideas are often stepping stones to right ideas, both because they help define the real boundaries of the problem that you're facing and because you can iterate on a wrong idea to reach a right one."
These are wise words.  But there is a danger in words like "best" and "right."  The danger is that we fool ourselves into believing that it is possible to know what is "best" or "right."

The world of startups is uncertain; pledging your allegiance to what is "best" or "right" helps you deal with that uncertainty, but carried to its logical extreme, can turn you into an ideologue.  After all, if you give yourself the right to decide what is "best" or "right," so might everyone else.  Pretty soon, everyone is arguing about what they think is right, and the end result is chaos and conflict.

To succeed, you need to focus on something bigger than yourself.  Each team member's goal should be to keep finding ways to move the company closer to its ultimate goals.  Each discussion or debate can be framed in these pragmatic, rather than ideological terms.

Too often, startup entrepreneurs and engineers get sucked into focusing on who's "right"; a natural thing for people who have excelled at providing answers.  But "rightness" doesn't matter; what matters is achieving your goals.

A Tale Of Two Americas (and a failure of imagination)

I really enjoyed this recent rant that appeared in the MIT Entrepreneurship Review, "The Unexotic Underclass":

The editorialist, C.Z. Nnaemeka writes eloquently and movingly about Silicon Valley entrepreneurs' tendency to focus on a target market that resembles that of a Hollywood sitcom: Young, white, and improbably blessed with money and free time.
"Those who are entrepreneurially-minded but young and idea-poor need serious direction from those who are rich in capital and connections.  We see what ideas are getting funded, we see money flowing like the river Ganges towards insipid me-too products, so is it crazy that we’ve been thinking small?  building smaller? that our “blood and judgment” to quote Hamlet, have not been  “so well commingled?”

We need someone bold (and older than us) to stand up for Big Problems which are tough and dirty.  But what we especially need is someone to stand up for big problems – little b, little p –which are tough and dirty and too easy to overlook."
Nnaemeka doesn't just criticize those who focus their talents on the trivial; she also criticizes those who call for entrepreneurs to solve the big, sexy problems of the third world.  Her point is that the problems of the American underclass are real, but aren't "sexy" in the same way that helping poor African children is.

I agree; I think entrepreneurs are like zoos, which focus on "charismatic megafauna" (the animals people want to see, like lions and elephants) at the expense of equally deserving animals.

I appreciate Nnaemeka's passion, but I fear that her approach falls into the same trap as those she criticizes: A failure of imagination.  Just as those she criticizes have a blinkered view of the world, so does she.

When I studied design, the most important thing we were taught was to see problems from the point of view of the user.  We were encouraged to avoid the design masturbation of building yet another mountain biking product.  One of my projects, for example, was to redesign the cart used by the janitors at UCSF Medical Center.

Yet calling on entrepreneurs to "save the world" for non-economic reasons is equally blinkered. People don't act against their own economic interests.  What has worked is educating folks on the opportunities that do exist, much as C.K. Prahalad did with his book, "The Fortune at the Bottom of the Pyramid" which educated people on the business opportunities available in poor, third-world markets.

To generate real change, explain the problems of the unexotic underclass and show how you can get stinking rich by solving them.

The Web Era Is Over (Unless You're Not A Consumer Internet Company)

I'm constantly amazed by how many people want to start throwing dirt on the web era, claiming that everything is now mobile first.

AllThingsD weighed in with the provocative headline, "Could Pinterest Be the Last Big Web-First Internet Company?"
“We’re probably the last big website,” Sharp said. “As far as I know, we’re the last startup to become high-profile on the Web.”

It’s a provocative argument that Pinterest could be sandwiched between the Web and mobile eras — following Web giants like Facebook and Tumblr as they slide to mobile, as well as others, like Pandora and Groupon, which have made an even stronger leap to phones, and preceding more recent mobile-first stars like Instagram and WhatsApp."
The problem with this argument is that, as usual, it assumes that the only Internet companies that exist are consumer companies.

Mobile/touch computing is a game-changer, especially for consumer computing.  My family has had computers since I was just a lad, starting with an Apple ][+ in the early 1980s.  My mom never started using them until about five years ago, when she began using AOL to email her friends (and send me a never-ending stream of chain letters; I've been tempted many times to build a special app that would run every forwarded email through and send an automated debunking email--I think it would be very popular with a lot of 30- and 40-somethings with retired parnts).  But her usage was still minimal, and was often punctuated with calls asking me for tech support.

Two years ago, she got an iPad. Now she uses it for hours each day.

Phones and tablets are far superior for casual consumption.  But I use my desktop for the vast majority of my non-email work, and I still prefer it for email as well, given the volumes that I receive and send.

I also use my desktop for writing documents, composing blog posts, and just about every other creative endeavor I perform.

You can't beat large screens and physical keyboards for doing real work.  And until we're all using neural implants with our Google Glass 7s, that's not going to change.

The Most Important Course I Took At Stanford

I have two degrees from Stanford University--a BS in Product Design, and a BA in Creative Writing.  Stanford is renowned in both disciplines; the is probably the world's leading center for design thinking, while the Stegner Fellowship for writers is one of the most prestigious in the literary world.

Yet the most important course I took at Stanford wasn't in either subject.  Nor was it it the sciences or engineering.  The most important course I took at Stanford was Peer Counseling.

The Bridge Peer Counseling Center is an all-student run counseling program that was started by the late, great Vince D'Andrea.  While I was an undergrad, I took the Peer Counseling course, and later served as a TA for the program.

The heart of the peer counseling philosophy is non-judgmental active listening.  This had a huge impact on me, since as an arrogant young prodigy (I started Stanford at 15, after skipping several grades and graduating as the valedictorian of my high school) my preferred mode of communication was the judgmental monologue (my family might argue that the monologue part hasn't changed much!).

Non-judgmental active listening means that you focus entirely on what the other person is saying, checking your understanding with occasional phrases like, "What I hear you saying is..." or "I think what you're saying is..."

Applied in a shallow way, it can seem mechanical and manipulative.  But applied sincerely and skillfully, it is profoundly powerful.

The message it sends is that you're focused on the person, and are making every effort to understand them.

If you're a startup entrepreneur, you can apply this technique in many ways. Active listening helps you understand the real needs of your customers (rather than monologueing about the greatness of your product).  It helps you relate to your employees and teammates (so you aren't blindsided by their actions).  And it helps you hear what people are actually saying, rather than what you want to hear.

The Real Odds That Your Startup "Succeeds"

Henry Blodget is a smart journalist who knows how to drive pageviews.  He certainly got me to click through when he picked the headline, "DEAR ENTREPRENEURS: Here's How Bad Your Odds Of Success Are"

Blodget riffs on a tweet by Paul Graham to estimate the odds of startup success:
"Graham says that 37 of the 511 companies that have gone through the Y Combinator program over the past 5 years have either sold for, or are now worth, more than $40 million.
Most entrepreneurs would probably view creating a company worth more than $40 million as a success (unless the company raised more capital than that). And, on its face, the "37 companies" number seems relatively impressive.

In fact, however, the number tells a scary and depressing story.

This number suggests that a startling 93% of the companies that get accepted by Y Combinator eventually fail.
If only 37 of the companies that have applied to Y Combinator over the years have succeeded, this is a staggeringly low 0.4% success rate.
Put differently, only one in every 200 companies that applies to Y Combinator will succeed."
I don't contest Blodget's numbers. Y Combinator is a great program, and I agree that it ought to give its companies an above-average chance of success.

What I do contest is the definition of success.  One of the YC companies I was an investor in was AppJet, which produced EtherPad.  AppJet was sold to Google for less than $40 million.  Yet all the investors in the deal made money, and the founders became millionaires.

Moreover, the founder of AppJet, Aaron Iba, went on to become...a partner at Y Combinator.  It sure doesn't seem like Paul Graham was disappointed with him.

If you raise $10 million, any exit under $40 million is a disappointment.  But if you're capital-efficient and build a real business, even a smaller exit can be a great outcome for everyone involved.

I'd love to know how many YC companies made their investors money--that's a far better measure of success.

How do you manage board members? Like you manage anyone else!

I'm a huge Mark Suster fan, so I think his post, "8 Tips To Get the Most Out of Your Investors and Board," is outstanding, and a must-read for any entrepreneur.  I don't think there's anything I can add:

What I will point out is that all of the principles that Mark outlines ought to apply to your employees as well.  Consider the points that he and Datasift CEO Rob Bailey make:
  • Spend time building investor relationships long before you raise money. 
  • By spending more time educating your board on your business you get more valuable advice from them
  • Your goal should be to turn your VCs into extended members of your team to get real value from them
  • Understanding where your VC partner sits in their respective fund and where their fund is in the cycle of its investment lifecycle will help you understand your VCs behavior.
  • Email updates frequently
  • Send texts, not emails, for rapid responses
  • Ask for short conference calls
  • Always seek input
  • Assign tasks
  • Fight hard, yield when appropriate, and always be willing to take feedback
  • Manage expectations (before and after meetings)
  • Results & measurement oriented
Every single one applies to employees as well.  Even the most VC-centric, understanding the fund cycle, applies to employees.  You need to understand where they are in their career, as well as their monetary situation, to better understand their behavior.

The meta point is that the biggest mistake entrepreneurs make is in treating board members as either professors (who are grading you) or a nuisance (to be kept in the dark as much as possible).  Board members and investors are just like employees--the difference is that while you can't fire them, they pay you (rather than vice versa).

The Power of Saw Sharpening

When you're an entrepreneur, there's never enough time for everything.  One common response is to set up a to-do list, with the highest priority items at the top.  The problem is that this always prioritizes the urgent and important (what Stephen Covey labeled "Quadrant 1"), leaving important but not urgent items to languish.

Covey called focusing on these critical items, "sharpening the saw," referring to the wisdom of pausing to sharpen your tools, rather than simply sawing away without pause.

It looks like two of the startup world's great CEOs, Jack Dorsey and Lew Cirne, have figured out this principle:
"For Cirne at New Relic, Monday is for strategic review. On Tuesday, the whole day is for tactical product review. On Wednesday, Cirne does press interviews, folllows up with calls and generally catches up. On Thursday and Friday he codes.

Now with the space and time left open by operations out of his hands, Cirne can code during the week and take breaks to get away to do development. He spent his first week-long coding marathon starting January 1 in Lake Tahoe at his family’s cabin. He did another week in March at the family cabin. A few weeks ago, he invited a few other developers to spend a week in a cabin on Mount Hood. He’ll go to Santa Barbara in the next few weeks for his next retreat."
Cirne has the luxury of past success (Wily Technology) and an experienced and trusted president to run things on a day to day basis, but any startup entrepreneur can apply the "theme day" approach to time allocation.

Start by simply setting aside one day per week--trust me, unless you're also running all the technical operations and customer support for your startup singlehanded, you can manage one day per week.

And as you sharpen your saw and improve your productivity, you'll be able to leverage a positive feedback loop.  The more productive you become, the more time you'll be able to set aside for strategic pursuits, which in turn will improve your productivity further.

Silicon Valley is awesome (but it isn't the answer to every problem)

I love Silicon Valley.

It's a phenomenal place that I've chosen to make my personal and professional home.

It's brought me success (whatever that is) and happiness.

But I understand its limitations, and don't have a problem talking about them.

It is an echo chamber, whose brainstorms don't always "take" elsewhere.  Just ask all those Formspring investors.

It is a homogenous place, with a vast group of people who read the same things, go to the same events, and make the same points.

It embraces failure more than most places (which may be the main reason for its dynamism) but still engages in a relentless boosterism that makes enterpreneurs who haven't gotten rich feel inadequate.

And another of those limitations is our belief that the Silicon Valley way is superior, and can solve any problem.

In my opinion, we often fall prey to the "man who has a hammer" syndrome. Changing economy? Everyone should learn to code. Schools are failing? MOOCs to the rescue!

Think of Silicon Valley's great success stories, like Apple and Google. We excel at technology and information. We don't do so well at people (anyone want to argue that Facebook has been good for our relationships?).

As an entrepreneur, you have the power to solve problems and change the world.  But choose your problems wisely, because not every problem is a nail.

The Work of Life

I really loved this passage from Jonathan Safran Foer's commencement address:

"Being attentive to the needs of others might not be the point of life, but it is the work of life. It can be messy, and painful, and almost impossibly difficult. But it is not something we give. It is what we get in exchange for having to die."
Or, as E. M. Forster put it even more concisely, "Only connect!"

Does it suck to be an old engineer? An old entrepreneur? An old VC?

I paused when I read a recent snippet from an older engineer:
"At my recent 40th Stanford reunion, everyone I knew who had stuck with engineering (as opposed to becoming an entrepreneur or a VC) was either unemployed or in fear of becoming so. A woman from my freshman dorm told me her brother who’d gone to MIT was also unemployed as were many of his classmates.

When not even a Stanford or MIT engineering degree is good enough to keep an engineer employed at 60, there is genuinely no market for engineers that age. Plan accordingly."
As the holder of just such a Stanford engineering degree, I felt the cold chill of fear, even though the quote specifically excepted entrepreneurs and VCs from the ageism.

There are reasons it's hard for an older engineer--the hot technologies of today are considered tired and out of date within 5 years.  Meanwhile, the computer science schools (including folks overseas like IIT) keep cranking out young, cheap(er) engineers who have no lives and are willing to work insane hours.

(Side note: I do think this is more true of coders; my dad has a Ph.D. in solid-state engineering, and is still employed today at the age of 70.  But I don't think the fundamental technologies involved in fabricating semiconductors change every 5 years; they simply miniaturize and evolve.)

Yet the same thing is true of entrepreneurs and VCs.  Do you really want a VC who doesn't understand new technologies?  (This is a cue for wags to say, "I'd settle for a VC who understands any technology.  Instant rimshot.)  And if you're an entrepreneur, how far are you going to get if you don't "get" the latest technologies and market developments?

The sad thing is, there are definite advantages to age.  People who have been through the wars know which traps to avoid.  They also tend to be much lower drama, having realized that starting a holy war over which framework to use just isn't worth it.

The key is to stay current on trends.  When you combine current knowledge with wisdom, you have a truly powerful combination.  But employers have to be open-minded enough to look for and value it.

Thursday, June 06, 2013

Don't worry about demand spikes--worry about if there is demand (puzzles vs. mysteries)

I sometimes run into entrepreneurs who are very focused on making sure that they have the infrastructure to meet demand.  They don't want to disappoint their users or damage the reputation of their startup.  Those are both very worthy goals.

But this loses sight of an important fact: Don't worry about demand spikes--worry about if there is demand!

Figuring out how to deliver a service is a puzzle; you know that there is a right answer, and given some time and effort, you know you can solve it.

Figuring out whether delivering a service is worth it is a mystery; you don't know if there is a right answer, and you don't know whether or not you'll be able to find it.

Focus on the mysteries, not the puzzles.  The mysteries can sink your startup long before you run out of fun puzzles to solve.

Mental models for startup entrepreneurs

Farnam Street is one of those wonderful blogs that doesn't cover the startup industry, but does help you think.  One of their recent posts discussed the importance of mental models:
"Small models of reality need neither be wholly accurate nor correspond completely with what they model to be useful. Your model of an iPhone may contain only the idea of a rectangle that serves multiple functions such as sending and receiving data, apps, displaying moving pictures with accompanying sound. Alternatively, it may consist of an understanding of the programming necessary to make the device work, the protocols, the physical limitations, and how the display actually functions, in which case you’ve eclipsed me.

What must be questioned now is whether adding information increases the usefulness of the model. If I explain how operating systems and API’s work, you will have a much richer model of an iPhone. For some of you that will mean a more useful model and for some it will not."
For me, mental models are simply a special case of storytelling. As a founder, your goal is to construct mental models that are just detailed enough, without going into minutiae that will slow down your progress.

For example, you could spend years studying the mechanics of startup financing, and understanding the origins of the accredited investor requirement, and the evolution of the convertible note.  But beyond a certain point, this additional detail doesn't actually drive the business.

Similarly, for most startups understanding what's actually happening under the covers within Amazon's cloud services or your datacenter is interesting but irrelevant.

I use the William James criteria: "A difference that makes no difference is no difference." We're so addicted to being right and being smart, we build LEGO Mindstorms when Duplo blocks would do.

Tuesday, June 04, 2013

The Drivetime Startup Doctor Is In

For years, I've successfully sold my expertise to raise money for cancer, and to contribute to the Unreasonable Institute.  But these were broad fundraising efforts, with contributions entitling donors to anything from an email to an in-person lunch.

Recently, a couple of folks reached out to me on Clarity, which made me think more about auctioning off phone calls.

The problem is that my schedule is so busy that I just can't yes to that many requests.  That's when it hit me: drivetime.

So as an experiment, I'm going to set up shop as "The Drivetime Startup Doctor."  I'm happy to do telephone house calls--as long as they take place when I'm driving in my car.  Because I have to pay at least some attention to the traffic around me, I'll discount my usual rates to compensate for any distractions and background noise.

Normally, my Clarity rate is $600/hour.  Driving from my home to my office, or vice versa, takes about 20 minutes.  So I'm prepared to offer a 50% discount for the inconvenience.  One call will set you back $100.

Now I could try to put together some kind of fancy website, but I'll keep it even simpler.  Just send me $100 via PayPal (my account is cyeh [at] mba2000 [dot] hbs [dot] edu; I think I set up my account back when I was still in business school, which is pretty terrifying).  Put "Drivetime Startup Doctor Donation" in the subject line, and list a couple of times that make sense in the message.  I'll get an email notification, and we'll arrange a specific 8:30 AM or 5:30 PM Pacific time slot for your call.

(Gee, this even sounds kind of like a spam email...good thing it's just an experiment!)

I have no idea if anyone is going to do this, but all it cost me was 15 minutes to write this blog post, so I think it's well worth the experiment!

P.S. Word to the wise--this is a very bad way to pitch me your startup.  Only send me money if you truly want my help and advice.

P.P.S. You know, you probably have some smart friends who can give you good advice.  You might want to try them first before you send your hard-earned cash to some stranger you found through his blog.

P.P.P.S. The beneficiary in this case will be Jason and Marissa's college funds.  Once TrustEgg enables social contributions, I will probably switch over the payment method.

The Four Types of Story

I consider myself a student of storytelling; last summer, I even worked with my kids to teach them Freytag's Pyramid (with mixed success).

That's why, when I heard Mary Robinette Kowal talk about her storytelling rubric on Writing Excuses (one of my favorite podcasts), I had to sit down and blog about it, despite it being 5 AM.

(Our dog Misty wakes me up early to go for a walk, so I'm usually for a bit around 3-5 AM before I return to bed).

Mary's insight is simple, but profound.  The essence of storytelling is to show what a character wants, then deny them that goal.  That's the source of tension.  The end of the story either gives the character what they wanted, or denies it to them once and for all.  That's the resolution.

Immediately, it struck me that there is a classic 2X2 matrix of story types:

1. Character gets what she wants/Is happy = Happy ending
2. Character gets what she wants/Isn't happy = Bittersweet ending
3. Character doesn't get what she wants/Is happy = Twist ending
4. Character doesn't get what she wants/Isn't happy = Tragic ending

Personally, I'm most interested in the Twist ending, because it emphasizes what the character learns about herself in the course of the story, but a Happy ending will do in a pinch!

Life has enough of the bittersweet and tragic without seeking it out in my fiction.

P.S. In the course of Googling information, I ran across this excellent worksheet, which explores these issues in greater depth, and which I intend to use with my kids!