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Entrepreneurs: Copying Success

August 21st, 2014 by Miki Saxon

What a joke.

The US startup ecosystem is complaining (more like ranting) that Rocket Internet is a copycat/cloner/, even scamster, because they are successfully creating new businesses in various parts of the world mimicking the business process of successful US companies.

But, as the Inc article and Rocket Internet’s CEO Oliver Samwer point out, copying is as old as business.

Samwer says he doesn’t mind being called a copycat. “Most innovations come on top of other innovations, if you really look at it,” he says. To Samwer, Airbnb’s suggestion that Wimdu is a “scam” is as silly as the idea of Samsung’s alerting customers about a Vizio scam of developing a similar flat-screen television and selling it for less money. “There’s always competition,” he says. “We win because we take our work very seriously.”

Let’s get serious, folks.

  • Ford didn’t invent automobiles.
  • Boeing didn’t invent airplanes.
  • Apple didn’t invent computers, MP3 players or mobile phones.
  • Google didn’t invent the search engine.

The idea that most Silicon Valley startups are original is hilarious.

In fact, many of the current service darlings were done on Craig’s List long before they were a twinkle in their founder’s eye.

tumblr_nagcp0gNlN1qzqh0wo1_500

There’s also a small company started by Jack Ma called Alibaba.com, which has many parts that mimic the same companies that Rocket does.

Not only that, but many of Rocket Internet startups are tailored for developing countries.

What I think has infuriates entrepreneurs is three-fold.

  1. They didn’t think of doing it first;
  2. even if they did funding wasn’t available in the US and finally,
  3. Rocket Internet is a German startup and Germany, as we all know, is highly risk adverse.

It’s also incredibly successful.

Since its founding in 2007 by Oliver Samwer, and his two younger brothers, Marc and Alex, Rocket Internet has helped launch over 70 companies across 50 countries, generating a combined revenue of $4 billion.

Note that the $4 billion is revenue, not valuation.

It’s called success—whether you approve of it or not.

Image credit: Andrew Parker/The Gong Show

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Comeuppance

August 20th, 2014 by Miki Saxon

https://www.flickr.com/photos/cheezepix/4933836639Tech currently has a high profile for arrogance, not to mention chauvinism and bigotry, with Google, Apple and Facebook are its most public whipping boys.

However, their comeuppance came with the intense media focus that will likely force them to at least put some effort into cleaning up their respective acts.

Not like their psychological brethren on Wall Street.

And while tech has a modicum of excuse that stems from age—its frat house culture has gotten worse as entrepreneurs have gotten younger—proven by the numbers, i.e., more women entered tech in the 1980s than do today—Wall Street has none.

The investment banking world has always been a bastion of white, male elitists; and hardcore harassment—an old boys group that didn’t give a damn what anybody thought.

Arrogance has been synonymous with investment bankers for decades, so seeing it kicked in the teeth by upstart tech arrogance was exhilarating.

Google’s Larry Page created his own acquisition yard stick,

The toothbrush test: Is it something you will use once or twice a day, and does it make your life better? …The esoteric criterion shuns traditional measures of valuing a company like earnings, discounted cash flow or even sales.

Page, for example, is looking for “usefulness above profitability, and long-term potential over near-term financial gain.”

Potential and usefulness are esoteric concepts to most bankers and “long-term” isn’t even in their vocabulary.

Bankers are fine with the hard stuff revolving around money, but are often useless on human side.

But often, when big tech companies are looking to grow through acquisitions, it is the culture and vision, not the earnings and revenue, that are of paramount importance.

Of course, investment banks need to lose a lot for it to really start mattering, but it looks like they are.

The acquiring company did not use an investment bank in 69 percent of American technology acquisitions worth more than $100 million this year, according to Dealogic.

All I can say is that it couldn’t happen to a more deserving group of guys—their comeuppance was a long time coming and it’s hitting the only place they might notice—their bank balance.

Flickr image credit: Chris Hartman

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Ducks in a Row: To Die For…

August 19th, 2014 by Miki Saxon

https://www.flickr.com/photos/gidzy/3000682242

Last year I suggested creating the SMIA (Social Media Idiot Award) as a way to honor all those who assist in their own arrests via social media.

But that was then…

Smart phones have enabled great leaps to previously unreached levels of stupidity.

Last month I shared the selfie stupidity exhibited by spectators at the Tour de France.

I now believe the SMIAs have achieved Darwin Award status.

For the innocents among you, Darwins are given posthumously to people for removing themselves from the gene pool, i.e., their death is the result of their own overwhelming stupidity, such as the couple that went past a barrier set up to keep people off the cliff edge at Cabo de Roca and slipped while trying to take a selfie—and did it in front of their kids.

Here are other recent entrants.

Last week a man in Mexico was taking a selfie when he accidentally shot himself in the head. Others have sustained injuries while taking selfies: A man was trampled by a bull in France while trying to take a photo in front of it, and a reporter was nearly hit in the head by a stray baseball while snapping a photo of herself.

Culture and societal norms change.

Starting in the Elizabethan era people longed to be a “nine days’ wonder.”

Since the Sixties people hoped for “15 minutes of fame.”

These days they are willing to die for 15 seconds of social media fame.

Who said “change equals progress?”

Flickr image credit: Gidzy

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Friends, Colleagues and Acquaintances

August 18th, 2014 by Miki Saxon

I have two best friends, although according to the sign one of them gave me last Christmas I actually have a ‘Good’ friend and a ‘True’ friend.

https://www.etsy.com/listing/169551933/a-good-friend-will-come-bail-you-out-of 

My friendships with them are unilateral— they have met only once and it’s doubtful they will ever meet again.

The sign-giver is the true friend, while the other prefers good friend status, although she offered to bail us both out, which should count for something.

The sign hangs by my desk and I look at it frequently.

It is a constant reminder of all we have shared; all we have helped each other get through; all the stuff, both good and bad, that is coming down the future.

The sign has taken on even more meaning since I read Adam Grant’s post You’re Not My Friend. Grant is Wharton’s top-rated professor and the author of Give And Take (I wrote about the research for it here) and a very smart guy when it comes to human interaction.

Grant takes note of people who claim him as a friend, let alone those who have asked to friend him on Facebook.

Judging from recent friend requests, my friends apparently include a person who ignored me in grad school, a second cousin’s high school classmate, a colleague’s mentee, a peewee soccer teammate I vaguely remember, and some guy who sat at a table near me at a restaurant once.

He then helpfully provides seven criteria with which to judge whether you are a colleague, an acquaintance or a friend.

I should also note that Grant is under 40, so you can’t consider him an old fogey who doesn’t understand today’s social world.

If you number your friends in double or triple digits, let alone as a cast of thousands, you’re probably in for a letdown.

While Facebook uses ‘friends’ as a catch-all term you shouldn’t do the same, it’s highly unlikely that many of them are ‘good’, let alone ‘true’ friends.

Image credit: WishUponASign on Etsy

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If the Shoe Fits: Seeing the Forrest, but not the Trees

August 15th, 2014 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_mSince Spring the media has been sharing stories and statistics about the rampant sexism, ageism and general bigotry in tech, its self-proclaimed “meritocracy” and the amazing male hyperopia (farsightedness) that seems almost incapable of recognizing bigotry in themselves or those close to them.

Y Combinator President Sam Altman and founder Paul Graham are a good example.

Last month Altman posted the importance of eliminating the gender bias in tech and Silicon Valley in particular, and that people need to stop pretending.

“One of the most insidious things happening in the debate is people claiming versions of ‘other industries may have problems with sexism, but our industry doesn’t.’”

He cited Y Combinator’s track record of accepting women founders into the incubator as proof that it isn’t sexist.

He did not, however, explain Graham’s statements in May that he doesn’t fund founders with strong accents or women who have/want kids.

Altman thinks HR can be a solution.

“Our sense is that many will benefit by doing it [human resources infrastructure] earlier. Traditionally, startups have thought of HR as a drag on moving fast and openness, but a well-running team is one of the best assets a company can ever have.”

However, the dozens of women who work for established companies with plenty of human resource infrastructure and have shared horrific stories on platforms from Whisper to Fortune are proof that rules don’t work.

The real solution in any company, from startup to Fortune 50 is a founder/CEO who backs a culture that is blind to gender, age and color and, most importantly, walks the talk, both professionally and personally.

This puts you, as a founder, in a position to truly change the working world.

Image credit: HikingArtist

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Entrepreneurs: Stupidest Funding Criteria

August 14th, 2014 by Miki Saxon

https://www.flickr.com/photos/fortunelivemedia/7587824160

Anyone who tracks the startup community hears stories of the stupid criteria investors use when deciding who to fund.

  • No strong accents or women with young kids or who are planning on having kids according to Paul Graham of Y Combinator (more on Graham tomorrow).
  • An anonymous investor who, although he considered the product and team brilliant, passed because the founder wasn’t Caucasian.
  • Age (way off base)

At a guess, I’d say that more than 90% of stupid turndowns are based on standard bigotry.

The other 10% fall in the Stupider category

  • Dislike of founder’s alma mater
  • Talk funny (Southern, Bostonian, New England, New York, Texas, etc.)
  • Grooming bias

Now Peter Thiel has added a new bias that is so silly it calls for a Stupidest category.

Don’t fund anyone wearing a suit.

A slicked-up entrepreneur is inevitably a salesman trying to compensate for an inferior product. Based on this perception, Mr Thiel’s venture fund instituted a blanket rule to pass on any company whose principals dressed in formal wear for pitch meetings.

There’s a basic problem with these kinds of rules.

  • No rule can be applied universally, without question and no exceptions.
  • Universal rules are just another form of bigotry—one size does not fit all.

But if a suit is a sign of “a salesman trying to compensate for an inferior product” then why does Thiel himself wear a suit?

Flickr image credit: Fortune Live Media

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The More Things Change…

August 13th, 2014 by Miki Saxon

https://www.flickr.com/photos/wfryer/11347987415The more they stay the some.

Einstein said, “The definition of insanity is doing the same thing over and over and expecting a different result.”

George Bernard Shaw said, “The single biggest problem with communication is the illusion that it has taken place.”

Both of these go a long way to explaining the unchanging culture that fosters gender harassment in the workplace, most prominently in STEM fields.

…666 responses, three quarters of them from women, from 32 disciplines, including anthropology, archaeology, biology and geology. Almost two-thirds of the respondents said they had been sexually harassed in the field. More than 20 percent reported being sexually assaulted. Students or postdoctoral scholars, and women were most likely to report being victimized by superiors.

Does a woman or minority in a leadership role actually have more ability to help level the playing field? Not hardly…

…when minorities and women behave in a way that calls attention to their race or gender characteristics — i.e. by advancing others like them — it separates them from other white male leaders, causing them to be devalued by their peers.

Schmoozing and small talk are considered lubricant in business negotiations, but they don’t work for women.

Men who engaged in small talk were likely to get positive ratings on questions about trust, overall impressions and solid foundations for a future relationship, (…)  When it came down to final offers, they were willing to give the men who chit-chatted nearly 8% more than they offered women who engaged in small talk.

Ben Horowitz, of Andreessen Horowitz, has a new book about startups and the Valley called The Hard Thing About Hard Things. There are exactly four women mentioned in the book and one is his wife.

In the first 90 percent of the book, I counted three females: a human resource staffer, a woman whose husband ran NetLabs, and Horowitz’s wife Felicia, a woman with “award-winning green eyes” whose focus seems to be family and her husband’s success. He doesn’t present a real-life female peer until four pages from the end, when he hires Margit Wennmachers, a marketing guru-turned-venture capitalist whom he dubs “the Babe Ruth of PR” and “Sultan of Swat.”

There are many anecdotal stories from women founders on the varied ways they are hit upon by potential investors, but this one in Forbes is first person sourced.

I met the author several months ago and was floored by the stories she had to tell about her dealings with mostly male investors. Like many men (as she writes), I knew women in tech faced a certain degree of chauvinism and harassment, but I’d had no idea it was so barefaced and routine, in an industry that thinks of itself as egalitarian and forward-looking.

In the real world, however, it seems that traction is the best way to stop investors from hitting on you.

Payal Kadakia, the founder of ClassPass, thinks it’s the fact that her startup has started to gain significant traction and now investors who once had an upper hand actually want a piece of her business. And they don’t want to say or do something that could mess up their chances.

In a 2009 post about repentance I wrote, “Repeating the behavior makes it obvious that there is no real remorse and that you see getting caught as the true offense.”

Or, in the words of Friedich Nietzsche,

“The consequences of our actions take hold of us, quite indifferent to our claim that meanwhile we may have ‘improved’.”

Flickr image credit: Wesley Fryer

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Ducks in a Row: Old White Guy MAP

August 12th, 2014 by Miki Saxon

https://www.flickr.com/photos/fortunelivemedia/8963857659On August Max Schireson voluntarily stepped down from his CEO role to become Vice Chairman of MongoDB.

He did it to spend more time with his family.

He wasn’t forced out and no pressure was applied.

Schireson took a hard look at his life and decided that, based on his personal value system, he needed to change it.

It wasn’t bad, just not what he wanted it to be.

My hat is always off to everybody who puts their personal values ahead of the way our society scores the game.

But what about the countless men who would make the same choice if circumstances didn’t prevent it?

The same things that impede women from viably combining aggressive careers with family also impede men—in spades to at least the 10th power.

The people who want to see their kids grow up; want a relationship with kids and spouse, want choice-sans-repercussions, want to live their values aren’t a minority.

Jack Welch famously stuck his foot in his mouth on this subject.

Five years later the old white guys are still running 75% of the Fortune 500 and many are still saying the same thing—as are too many of the 25% who are neither old, nor white, nor guys.

But what I find truly depressing is the prevalence of old-white-guy MAP in Millennials.

Image credit: Fortune Live Media

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Things Are Not Always What They Seem: Influence

August 11th, 2014 by Miki Saxon

illusion

As someone who has lived more decades than most of my readers I can remember when having influence wasn’t considered a viable life goal.

But that was then…

Not only is it an acceptable goal, there are sites like Klout that track your influence and even companies and managers dumb enough to hire based on a candidate’s Klout score.

These days, influence is measured based on important criteria, such as number of friends and followers, tweets and other commenting and web presence—an impressive way to measure, to be sure.

As influencers become more intentional and influencees less discerning I thought this was a good time to repost something I wrote several years ago.

Influence = Manipulation

Every conversation about leadership talks about ‘influence’ and how to increase yours.

In a post at Forbes, Howard Scharlatt defines influence this way,

Influence is, simply put, the power and ability to personally affect others’ actions, decisions, opinions or thinking. At one level, it is about compliance, about getting someone to go along with what you want them to do.

He goes on to describe three kinds of influencing tactics: logical, emotional and cooperative, or influencing with head, heart and hands and talks about ‘personal influence’ and its importance in persuading people when authority is lacking.

A couple of years ago I wrote The Power of Words and said, “Personally, other than socially acceptable definitions, I don’t see a lot of difference between influence and manipulation,” and I still don’t.

I realize most people consider manipulation negative and influence positive, but they are just words.

I often hear that leaders are good people, while manipulators are bad people. But as I pointed out in another post,

  • leaders are not by definition “good;”
  • they aren’t always positive role models; and
  • one person’s “good” leader is another person’s demon.

Everyone believes that they use their influence in a positive way, but when you persuade people to do whatever who are you to say that the outcome is positive for them?

Influence, persuasion, manipulation; call it what you will, just remember that it is power and be cautious when you wield it.

And if you are on the receiving end of influence, be it active or passive, you’ll see a higher ROI by paying attention and being mindful of intent.

Image credit: Anonymous

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If the Shoe Fits: Hiring Responsibility

August 8th, 2014 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_mWhose responsibility or fault, if you’re feeling judgmental, is it if a hire goes south?

No matter the circumstances, that dubious honor lies with the hiring manager.

In the decades I’ve worked with hiring managers I’ve heard every conceivable (and inconceivable) reason, but none shifted the de facto responsibility (blame, if you prefer).

Most of the time managers’ claim some variation of ‘the candidate lied…’

Of course, that’s what reference checks are for.

Often it’s the manager who doesn’t

  • sufficiently think through the job;
  • consider the current team’s competencies;
  • accurately share the culture; or
  • was even consciously aware of the culture;
  • consider the candidate’s career interests;
  • etc., etc.

The main thing to remember is what good hiring actually means:

Hiring the right person into the right position at the right time and for the right reasons.

Change any “right” in this sentence to “wrong” and you’ll end up with a bad hire, but a bad hire does not mean a bad person.

Bad hires have four basic ingredients—

all of which are a function of the hiring manager’s MAP and can be overcome.

Founders, like many managers in larger companies, frequently claim they are too busy to take time to lay the groundwork for solid hires and then wonder why they make hiring blunders.

Poor hiring leads to high turnover.

High turnover shrinks your candidate pool because it wrecks your street rep and street reps are forever—good, bad or indifferent—nothing fades away in this digital age.

Image credit: HikingArtist

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