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If the Shoe Fits: How VC Favoritism Can Cripple Your Startup

June 24th, 2016 by Miki Saxon

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

5726760809_bf0bf0f558_mIt’s a know fact that the more you are “teacher’s pet” or a “favored player” the more you will be called on in class and the more playing time you’ll get.

Even in families, the most-favored-child typically succeeds more than their siblings.

So it should come as no great shock that when VCs invest in similar companies, which they often do, they will favor one above the other.

And that favoritism usually results in more money, more introductions, more involvement, in fact, more everything, which results in substantially more innovation.

The data showed that companies tied to a competitor by at least one VC firm in common were indeed less innovative than those unencumbered by such ties; in fact, they were 30 percent less likely to introduce a new product in any given year.

It gets worse.

The UNfavored startups were 55 percent less likely to introduce a product.

Proximity mattered, too; those farther away from a shared investor were 56 percent less likely to introduce a new product.

What if your VC is part of the “golden circle?”

Companies tied to VCs in the top 25 percent of reputation indexes were significantly less likely to introduce new products in any given year.

Oops.

And I’m willing to bet similar stats apply to super angels, regular angels, incubators and the rest of the funding world.

Rory McDonald’s research is just one more reason not to be blinded by the money and to make sure your due diligence is super-diligent when evaluating funding offers.

Image credit: HikingArtist

Entrepreneurs: Soledad O’Brien and Starfish Media Group

June 23rd, 2016 by Miki Saxon

Soledad OBrien

What was your work history before you became a founder?

Many founders don’t have senior management experience, let alone CEO/President or COO experience.

Some are young; others were non-executive managers, team members or individual contributors.

Which is OK, if they recognize that having the title and filling the shoes are two different things.

That’s not just my comment; it’s what award winning journalist Soledad O’Brien, founder and CEO of Starfish Media Group, said about herself.

Another challenge was that I was successful in my previous role because I really worked hard and took a lot of responsibility for making things good. But that’s not actually a great skill for being a boss. The job of the boss is to help other people reach their goals and their dreams.

At what point will I actually grow into this job, because I have the title? At what point will I actually be making decisions like someone who is the C.E.O. of the company? I would say it took a solid year before I felt good about it.

And I’m willing to bet, based on her own words, that she has little interest in hiring “stars,” who are usually full of attitude and ego.

You hire for character and teach people skills. And environment is very important to me. It’s important to me that people aren’t unpleasant and that they treat each other respectfully. It’s hard to be creative when there’s someone or something that’s really irking you.

So are you a person of integrity who makes the environment a really nice space? I will watch how they treat the person at the front desk versus me.

Whatever kind of startup you have, take a few minutes to read the O’Brien interview.

Then look in the mirror and accept that no matter what your background is you probably have a steep learning curve before you become your title.

Flickr image credit: Starfish Media Group

Mark Benioff’s Solution to Information Overload

June 22nd, 2016 by Miki Saxon

https://www.flickr.com/photos/cambodia4kidsorg/5310317688/Everyone complains about information overload.

Playwright Richard Forman has a term for it.

“Pancake people – spread wide and thin as we connect with that vast network of information accessed by the mere touch of a button”.

Psychologist and behavioral neuroscientist Daniel Levitin, author of the upcoming book The Organized Mind: Thinking Straight in the Age of Information Overload, recommends retraining your brain.

“Our brains are equipped to deal with the world the way it was many thousands of years ago when we were hunter-gatherers. Back then the amount of information that was coming at us was much less and it came at us much more slowly.”

But Salesforce CEO Mark Benioff has a much simpler solution.

“I deleted my Facebook account completely. I found it was just overwhelming me. I’m only on Twitter, I’m on SalesforceOne, which is my internal one for work, I’m on email, and that’s it. And I’m limited to that. I’m trying not to take on more stuff. I was with a friend this weekend, he’s got his Twitter, his Facebook, he has his Snapchat, he’s got all these – too much.”

Of course, part of the overload is work-related, but it’s amazing how much is pure trivia driven by FoMO and/or the need to impress by sounding knowledgeable about a twist in Game of Thrones.

You are the only person who can evaluate just how necessary your various information streams are sooner rather than later.

Because even the smallest stream adds to the river in which it is oh, so easy to drown.

Then you need gather your courage, follow Benioff’s lead and shut down the unnecessary streams.

Your sanity will thank you.

Flickr image credit: Cambodia4kids.org Beth Kanter

Ducks in a Row: Millennials (and Everybody) Need Quiet

June 21st, 2016 by Miki Saxon

https://www.flickr.com/photos/izzie_whizzie/2146972746/

If you’re old enough, like me, you remember when open offices for knowledge workers/professionals, i.e., cubicles, happened.

I dodged that bullet in 1980 when my company moved into new space and I got a private office, but only because of my hearing.

In those days, recruiters spent the day on the phone and, even with an amplifier, I needed quiet to hear my clients and candidates.

Everybody complained; nobody liked the bullpen/open office concept. It did not increase productivity.

Originally, the idea that noise equals energy was sold by restaurant designers.

Trendy places started using smaller tables and packing them more closely together. They eliminated sound absorbing items, such as carpeting, and adding more hard surfaces and louder music, which forced customers to talk louder, thus upping the decibel level even more.

The myth that eliminating walls boosted collaboration and creativity was sold by consultants, architects and office designers and eagerly bought into by management, primarily because it saved money — it’s a lot cheaper to build out no-wall office space.

And it became almost holy writ when discussing Millennials.

But a new survey from Oxford Economics, an analysis firm spun out of Oxford University’s business college, proves that’s not the case. Rather than fancy perks and giveaways, most respondents want quiet.

More than half of the employees complained about noise. The researchers found that Millennials were especially likely to voice concern about rising decibels, and to wear headphones to drown out the sound or leave their desks in search of quieter corners. Among the supervisors, 69 percent reported that their spaces had been laid out with noise reduction in mind; 64 percent had engineered the workplace to mute noise intruding from outside of the office, too.

It takes quite to think, to create, to dream.

Neither today’s world nor workplace lend themselves to quiet.

That may change if workers become vocal enough with their demands.

And vocal is something at which Millennials excel.

Flickr image credit: Elizabeth Ellis

Golden Oldies: A Simple Productivity Secret for Managers

June 20th, 2016 by Miki Saxon

It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time.

We all know change is the only constant, but is change linear? Does everyone see changes the same way? Does it even matter? And if it does matter, how does it affect your work as a manager? Read other Golden Oldies here

jump_vectorsThe other day I said to a friend that I’ve turned into a real wimp. He thought I was kidding and said that I was the last person he associated with wimping out on anything.

I was surprised, but as we discussed it I realized that what I saw as wimpiness he saw as strength.

That got me to thinking how often what one person calls wimping out may be another person’s greatest act of courage. Likewise, what moves one person can leave another cold.

It’s all relative depending on your MAP, the circumstances and even the mood you’re in.

Sounds obvious, but it’s important knowledge, not information, but knowledge—maybe even wisdom—for any person responsible for motivating others, whether at work or in everyday life.

Image credit: nookiez CC license

If the Shoe Fits: Shock and Fear in Coder Heaven

June 17th, 2016 by Miki Saxon

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

5726760809_bf0bf0f558_mProgrammers in Silicon Valley are reeling.

What are they going to do?

No more clandestine recruiter calls from unicorn startups offering million dollar salaries, six figure sign-on bonuses, thousands of stock options and country club style perks.

And those graduating with CS degrees may find fewer startups bidding against each other for their services.

Not to mention layoffs. Layoff a programmer? Are you nuts?

Nope, that’s exactly what’s happening.

And, as an ex recruiter, all I can say is it’s about time.

Perhaps now candidate focus will return to the mission and the tech, instead of the dollars and bragging rights.

Because, in spite of the all the media coverage, there is a large number of programmers who don’t believe it will affect them — others, sure, but not them.

Of course, it’s hard when you’ve been the golden (mostly) boys and reality rears its ugly head.

But ask anyone in tech who has been around for awhile and they’ll tell you that change is constant and what goes up comes down — and eventually goes back up again.

Programmer jobs not excepted.

Image credit: HikingArtist

Entrepreneurs: Musical.ly — Channeling Andy Grove

June 16th, 2016 by Miki Saxon

In 1849 Jean-Baptiste Karr said, “the more things change the more they stay the same” and that’s still true today.

On the surface you wouldn’t think Musical.ly’s Alex Zhu Zhu and Intel’s Andy Grove have a lot in common, but you would be wrong.

Both created cultures that incorporate a critical attitude — paranoia —  although they look very different.

Andy Grove: “When I came to Intel, I was scared to death. I left a very secure job where I knew what I was doing and started running R&D for a brand new venture in untried territory. It was terrifying.”

Zhu Zhu: “The day we released this application to the market we realized it was never going to take off. It was doomed to be a failure.”

Musical.ly’s first pivot went from a video education app to a combination music/videos/social network that was catnip to their target early-teen demographic.

That led to growth, but it was slow growth, which the founders knew was leading to a slow death.

The a-ha tweak happened when they moved the logo and growth exploded.

They had realized that when people shared the music videos, the logo was cropped out on Instagram and Twitter. They repositioned it so now it was easy to see that it was a Musical.ly video.

Grove said, “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” (Grove’s paranoia did not condone bullying or a culture of fear.)

Zhu Zhu is far from complacent and keeps pushing and iterating faster.

“I think we have these scary moments all the time because you’re never safe. Even if you have tens of millions of users, you have to keep them always engaged. I think it’s better for us to be scared all the time rather than feel content that we built a successful product and now we can lay back.”

If you don’t care for paranoia, you can substitute a combination of never-ending mindfulness, objective reality as opposed to comforting assumptions and unremittingly honest feedback.

Image credit: musical.ly

To Be — or Not

June 15th, 2016 by Miki Saxon

We live in a time of peril.

Not from the outside, but from within.

Politicians pander to our fears.

Trolls threaten, bully and abuse freely and anonymously.

Speech is free only if you are one of “us” and not one of “them.”

Hate and bigotry thrive.

Fear runs rampant.

What should/can you do?

Live the words of a true thought leader.

638x624x129.jpg.pagespeed.ic.m_2vUE7lhv

Image credit: Quotation Box

Ducks in a Row: Pundit Poop from Graham and Kalanick

June 14th, 2016 by Miki Saxon

http://www.flickr.com/photos/spacepleb/249761636/

Background:

  • Austin passed a law requiring fingerprint-based criminal checks;
  • Uber and Lyft spent $8 million on a referendum to repeal it; and
  • lost on May 8.
  • On May 15 Paul Graham tweeted

    I will go out on a limb and say Austin has zero chance of being a serious startup hub without Uber and Lyft. (I am an investor in neither.)

Essentially, Graham, a man devoted to innovation and startups, discounted any possible innovation in ride-sharing beyond the current scenario.

(Keep in mind that this is the same guy who claimed that London’s not a startup hub because some establishments still enforce a dress code.)

Little did Graham know just how weak that limb was.

Contrary to his expectations, Austin did not reel in shock, wallow in grief or stay home.

Arcade City Austin / Request a Ride is a Facebook group that has grown rapidly in the weeks following Uber’s and Lyft’s departures. The group, which requires approval to join, is currently populated by more than 33,000 members who use the group to find rides to and from their destinations.

Beyond that effort, there is Zipcar, getme, Fare, Fasten, Wingz, zTrip, RideAustin and InstaRyde riding into town (if not already there) and all willingly complying with the required fingerprint background check.

All this should bring a note of caution to Uber CEO Travis Kalanick’s stated plan to avoid going public as long as possible.

“So I say we are going to IPO as late as humanly possible. It’ll be one day before my employees and significant others come to my office with pitchforks and torches. We will IPO the day before that. Do you get it?”

Amazing arrogance.

  • Graham discounts the world, the people in it and innovation itself.
  • Kalanick plans Uber’s IPO with no consideration of the economy, competitors or the speed at which things change.

Graham’s words have already come back to bite him; Kalanick’s probably will, too.

Flickr image credit: Dave Gough

Golden Oldies: Verbal Avoidance

June 13th, 2016 by Miki Saxon

It’s amazing to me, but looking back over a decade of writing I find posts that still impress, with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time.

I wrote Verbal Avoidance in 2011, not because it was new, but because it was so prevalent — and since them it’s gotten more so in spite of all the talk about honesty and authenticity. Read other Golden Oldies here

1211065_danger_help_need_peace_and_silenceThere’s a bad habit I see sweeping through companies. It’s not really new, but it has gotten much worse in recent years.

This particular habit used to be more the province of arguing couples, relationship counselors and divorce courts.

Always more of a guy thing, I now find it on the rise among women.

I call it “verbal avoidance” and it is irritating to say the least.

It occurs when something happens, or is supposed to happen, and person A needs to communicate that to person B.

And doesn’t.

A doesn’t because

  • what happened is going to upset B and A either doesn’t want to be the messenger, since messengers are sometimes killed or deal with the fallout if/when B gets upset.
  • B is waiting for A to notify him of good news, but B doesn’t have the information yet, so rather than saying that, he doesn’t call.

Of course there are dozens of variations, but they all boil down to the same thing—A does not communicate with B as expected.

When B does reach A, A offers a variety of reasons why the contact didn’t happen, but reasons don’t excuse anything.

B feels frustrated/disappointed/disgusted/angry/betrayed.

Verbal avoidance for any reason breaks trust.

And trust is the basis for any kind of relationship, whether at work, at home or in the world at large.

Silence isn’t always golden.

Stock.xchng image credit: Sigurd Decroos

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