August 26th, 2016 by Miki Saxon and KG Charles-Harris
A Friday series exploring Startups and the people who make them go. Read allIf the Shoe Fits posts here
As an entrepreneur, the constant stress around money in vs. money can at times be overwhelming and deeply emotional. Anxiety/angst/anguish/fear-and-loathing, and all synonyms thereof, best describe the feelings swirling in and around the entrepreneurial community these days when the subject of money, AKA funding, comes up — although not so much if you are one of the “chosen”, i.e. connected/entitled.
Bambi Roizen, Vator Founder and Managing Partner of Vator Investment Club, actually sees more money available. (Here is the video and full transcript of her talk at Splash one year ago. The quote is edited for clarity.)
There were about 20 post seed venture funds; now my friend Paul Martino counts probably 200 and there’re going to be a lot more funds. If you think that there’s going to be a crunch, don’t worry about it. I have a feeling there’s going to be a lot more funds coming to fill that void. I think there’s going to be a lot more specialized funds. (…) I think that’s we’re actually going to see local funds. Local funds investing in local businesses.
Because remember, this is the opening up of title 3 to the average investor. (…) It’s so hard sometimes to look at companies, because they’re so good at telling stories these days. I knew that was going to happen — you’re such great storytellers, you have to be, because you have to sell your vision. But it makes it really hard for investors to know what to invest in, so they’re going to invest in everyone, right? Money is available.
I asked KG what he thought from his perch as a serial entrepreneur who has raised funds in very different economies and attitudes over the years.
“What she says is interesting. However, what we’re seeing is the financialization of the startup/entrepreneurship industry, with the consequence that financial investors will get involved earlier, take larger stakes and leave less for the entrepreneur and the team.
One could say that it is good that capital may become easier to access (if this is true), but the cost of that capital is also increasing since there are now two layers of return that has to be provided much earlier than before — that to the VC and also to the VC’s LPs.
In other words, entrepreneurs are coming earlier into the VC model where only a few outsized returns matter and the majority of companies are pushed/allowed to fail.”
Many VCs treat startups the same way commercial agriculture treats seedlings — once they get to a certain size they are thinned in order to concentrate resources on fewer plants that will yield a larger harvest.
“This may actually be negative for a whole host of companies that have no way of maturing before being put under the pressure of the VC return machine.”
However, newly emergent investors may bring change to the game. Kobe Bryant and Jeff Stibel have invested together since 2013 and have started a new fund with their own money.
“Name selection is more important now than ever before,” says Alexandra Watkins, founder of brand consulting agency Eat My Words. “Your name has to work harder than it did 20 years ago.”
Driving the charge are shifts in technology and consumer habits. The ubiquitous presence of internet domain names and web addresses, or URLs, social media and the prevalent use of smartphones and tablets with their smaller screens call for new rules on how a company, product or service should select its name, marketing experts say.
I thought it was very good and sent it to several serial entrepreneurs who have been through the naming fire multiple times.
They also thought it was excellent and said to share it.
The Federal government is definitely out of favor, whether for doing too little or too much depends on your MAP (it never does enough for us and does too much for them).
In no part of the government is this more obvious than NSA; the poster child of dislike, distrust and disdain.
But those feelings should hold only for the leadership, not the techies who staff the place.
NSA hires a lot of techies and techies are techies the world over. One of the things they all have in common is that they love puzzles, especially math and logic puzzles—not just to work them, but to create them.
“Intelligence. It’s the ability to think abstractly. Challenge the unknown. Solve the impossible. NSA employees work on some of the world’s most demanding and exhilarating high-tech engineering challenges. Applying complex algorithms and expressing difficult cryptographic problems in terms of mathematics is part of the work NSA employees do every day.”
So if you love puzzles click the link above and try your skills. Here’s a sample from a software developer.
Four friends, Holly, Belle, Carol, and Nick, gather for May birthdays. Holly announces that she has a game before dinner. She hid gifts for each of her friends inside three separate boxes secured with padlocks. She challenges her friends to figure out the combination without consulting each other.
She provides the following information. All the padlocks have the same combination. The padlocks use 3 digits from 0 to 9. She also tells them that the sum of the three digits is equal to nine, and every digit is equal to or greater than the previous digit. Holly tells each of her friends one of the digits in the combination. She states, “I’ve given the first digit to Belle, the second digit to Carol, and the third digit to Nick.” The caveat is that the friends cannot share their numbers with each other or they will forfeit the gifts.
Then Holly gives her friends 30 minutes to open the padlocks while she watches and finishes dinner.
The three friends begin to think of the solution. One by one, they each try their hand at their padlock, but none of them opens the padlock. Seeing that no one has succeeded, suddenly Carol realizes she knows the answer, and successfully opens her box, revealing a new fitness tracker. Following this, Nick opens his padlock, revealing a new tablet; and Belle opens her box to find new pair of headphones.
Having watched this entire event unfold, can you determine the correct combination?
While Facebook wanted to wire India, it isn’t interested in doing the same in the US.
Though Central Valley harvests most of the country’s crops, tech workers often forget their neighboring region exists. In the Bay Area map according to Urban Dictionary, the Central Valley is jokingly referred to as “unknown parts.”
According to a recent Pew survey, approximately five million students still lack access to high-speed Internet. Experts have taken to calling it the “homework gap.”
Or turn your gaze to the other coast and some of the most beautiful countryside in America — Appalachia — home to some of the most grinding poverty and third-world living conditions to be found in the US.
Crunching all the data imaginable won’t always yield a solution, since anomalies do happen (for an in-depth understanding of that read Isaac Asimov’s Foundation series, still brilliant/viable after 60+ years).
Back when I lived in San Francisco, it was often termed “49 square miles surrounded by reality.”
That’s expanded to 7,000 square miles (contained in the nine-county Bay Area) surrounded by the reality of places like Fresno.
Tech needs to understand that technology in and of itself is not a solution.
Tech is digital, while the world and the humans who inhabit it are, and always will be, analog.
So while technology itself isn’t a solution, the ways it can be applied may be.
One more request.
School is starting soon and most kids are shopping, whether at Nordstrom or Walmart, while thousands of foster kids are facing school without even a backpack.
There are dozens of ways you can help them.
Skip a few Starbucks or Peets visits, choose a charity, check it out and donate the coffee money you saved.
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.
I’m sure that I’m not the only person who has moved through life harassed and harangued by all the nice, helpful, neat and organized folks who honestly believe that I’d be better off if I would change my habits and be more like them. Happily for me they’ve had no effect; like the leopard, my desk is still messy, I still work out and still eat healthy. What about you? Read other Golden Oldies here.
Reason 1: It provided a scientifically acceptable reason for having a messy desk and gave me permission to quit trying to clean it up. This was especially nice, since ‘clear desk’ is a constant item on my to-do list.
Reason 2: The clinically tested reason for having a perennially messy desk is creativity. How cool is that?
Reason 3: I beat the pattern because I have creativity, yet I eat healthy and go to the gym daily (not on weekends).
Essentially, the study showed that “Those in messy spaces generated ideas that were significantly more creative, according to two independent judges,… people that are organized and predictable, typically eat better and live longer than people who are disorderly. They also tend to have immaculate offices.
Dr. Kathleen D. Vohs, a behavioral scientist at the University of Minnesota and the leader of the study, seems to think that the only way a messy desk person could develop healthy habits is to clean up their desk.
“My advice would be, if you need to think outside the box” for a future project, says, then let the clutter rise and unfetter your imagination. But if your primary goal is to eat well or to go to the gym, pick up around your office first. By doing this, the naturally messy can acquire some of the discipline of the conscientious.
I’m willing to bet that Dr. Vohs is a clean desk person or she would understand that it’s not that simple.
But, as a messy desk person, I will tell you that you can build a healthy eating-gym attending persona without ever cleaning up your desk.
One caveat, in part of the study people were given a choice between chocolate and a healthy snack (carrot sticks?). The messy desk crowd took the chocolate, which meant a messy desk equals unhealthy choices.
However, based on a lifetime of experience with neat desk friends, all with lots of self-discipline, I think it just means they didn’t like chocolate.
Over the years, founders have asked my for my opinion and ideas on naming their company and/or product.
They ask, but they rarely listen.
Especially if they already have an idea — which they are usually in love with.
They aren’t looking for ideas, let alone an opinion that differs from what they already think.
They are looking for agreement and validation.
Of course, I’m not an expert and don’t present myself as such.
That said, common sense and past flubs say that product names need to be relevant — to the product, the market and especially to the target country/language/culture.
Additionally, they need to be easy to remember and spell — particularly “created” words.
Lean methodology recommends MVPs for market validation and the same should apply to naming.
Proof of the importance of listening to market input is demonstrated by CB Insights’ CEO/Co-Founder Anand Sanwal, who recently told the story not only of how the company got its name, but also its logo.
When we started the company, we called ourselves ChubbyBrain. We were always focused on private company data but we were trying to be hip and startup’y (or that is what we’d like to believe)
Anand says their wake-up call came from a potential client.
We love the product and the data and what you guys are doing. But we can’t buy a product called ChubbyBrain.
Wow. Talk about wake-up call; more like revelry played five inches from your ear.
“You can’t just extrapolate Google cars driving ~1.5 million miles under specific conditions (weather, topology, construction, traffic, accidents around it, etc.) to usurping the ~3 trillion miles/year under all conditions in the US. 1.09 fatalities per 100 million miles is the current non-self-driving numbers.
2014 had ~30k fatal crashes out of the 3 trillion miles traveled. We have to understand not how those crashes happened, but what makes the vast majority of them not happen. Luck is not a contributor, expertise is. Understanding human expertise is the key, not human frailty.”
Tech claims that security isn’t that big a problem and certainly not one that requires statutory approaches or regulation.
Two years ago Eddie Schwartz, vice president of global security solutions for Verizon’s enterprise subsidiary, said that self-driving cars will prove an irresistible target for hackers if they ever hit the roads.
Change if to when. Of course they’re irresistible; hacking and controlling a real car on a real road, with the potential of doing real damage, would be catnip to a large number of naïve kids (to prove they can), not to mention angry adults (getting even) and terrorists (creating chaos).
The cars aren’t yet able to handle bad weather, including standing water, drizzling rain, sudden downpours and snow, let alone police instructions (…) “I am decidedly less optimistic about what I perceive to be a rush to field systems that are absolutely not ready for widespread deployment, and certainly not ready for humans to be completely taken out of the driver’s seat.”
After every seven years of service, employees become eligible for a six-to-eight week paid sabbatical, which they can use to spend time with their families, travel, and accomplish longstanding personal goals — no strings attached.
Aarstol believes that a shortened workday could motivate employees to work more efficiently. And he is proving to be right through his own company, Tower Paddle Boards, which continues to expand, even after a year of rolling out the five-hour workday. Last year, it was named the fastest-growing private company in San Diego. Aarstol even published a book titled “The Five Hour Workday” this month.
REI, for example, gives its employees two paid days off a year, called “Yay Days,” to enjoy their favorite outside activity. The World Wildlife Foundation (WWF) takes every other Friday off, coining those “Panda Fridays.” We also give our employees every other Friday off — and we pay them for it. We call it the “18-Day Work Month,” and we truly believe it’s the key to a more productive workforce.
Gusto, a startup with 300 employees in San Francisco and Denver, just became the first midsize company in the US to cover fertility treatments in a way that will help single women and same-sex couples, according to Cigna.
However, some of the best perks cost the company nothing.
SEI made Forbes’ 2016 Best Small Companies list earlier this year, in part because of its unusual employee goal-setting policy. Twice a year managers meet with reports who lay out goals, including compensation, and SEI pledges to support employees’ wishes.
The main point: this is not a high-profile kind of job at Facebook, not a developer building a feature that will be used by millions, nor an engineer working on some of Facebook’s moonshot projects like its solar-powered drone or Internet.org.
“At Facebook we believe that ‘Nothing at Facebook is somebody else’s problem’ — it’s yours,” she writes. “I’m tasked with finding creative, innovative and realistic solutions for my clients, even if it has never been done before.”
In other words, she feels a sense of empowerment.
In fact, academic research shows that there’s a strong correlation between job satisfaction and employee empowerment. People who are given the freedom to solve problems in their own creative ways simply like their jobs and their companies better.
In fact, it’s the willingness of management to help their people function at their highest level, grow and succeed, i.e., a manager who cares, that is worth more than most tangible perks.
It’s amazing to me, but looking back on 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.
For decades, ‘culture’ didn’t get much respect. Many managers considered it ephemeral; smoke and mirrors served up by consultants focused more on their bottom line than their client’s. Today, the critical importance of company culture is a generally accepted management subject. However, creating a great culture isn’t enough; it needs a solid infrastructure to sustain it and keep it flexible as the company grows. That said, the most important action any boss takes is found in the final sentence of this post. Read other Golden Oldies here.
When you build an edifice that you want to withstand the stresses of everyday living as well as crisis and catastrophe it’s important to include structural supports in the design.
The same is true for corporate culture and I call them “infrastructure building blocks” or IBBs.
There are three categories of IBBs—philosophy, attitude/style, and policy. There are many things that can be included, but here is a list of the most basic ones, some are fairly self-explanatory, others include commentary and links where possible.
The policy category is the concrete expression of the Philosophy and Attitude/Style IBBs. Just as the Preamble to the Constitution delineates the doctrines underlying it, each Policy IBB supports one or more of the IBBs described above.
Policy IBBs should be reasonably broad—macro rather than micro—since they support a flexible process, not ossified bureaucracy. They are your most potent infrastructure—the most tangible and, therefore, the hardest to corrupt or ignore, but also the most dangerous, because they can turn into bureaucracy in the blink of an eye if you’re not careful.