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If the Shoe Fits: Is San Francisco/Bay Area Really the Promised Land?

October 24th, 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_mThe Bay Area is touted for being the best place in the world for startups; the place that all others try to copy.

But is it really the best place?

I live in Washington State, just across the river from Portland, Oregon, AKA, Silicon Forrest. Lots of startups including a few that have jumped ship from San Francisco.

Tilde joins startups like Simple, Panic, and Sprint.ly, which have already set up shop in the city. Big-name companies like Salesforce, eBay, and Airbnb have also opened outposts here in recent months.

New York State offers cushy lures and there’s a lot more to the state than just New York City.

START-UP NY, Governor Cuomo’s groundbreaking initiative, is transforming communities across the state into tax-free sites for new and expanding businesses. Now, businesses can operate 100% tax-free for 10 years. No income tax, business, corporate, state or local taxes, sales and property taxes, or franchise fees.

Detroit should be up for consideration, too, thanks to Dan Gilbert, Quicken Loan’s billionaire owner who bought 60 skyscrapers totaling nine million square feet.

He has brought 12,500 employees with him to downtown, and along with other private investors is funding the construction of a light-rail system that will connect the central business district with the neighboring Midtown district. Through his umbrella company, Rock Ventures, he formed a start-up incubator called Bizdom and a venture-capital firm, with some of the funded companies already expanding into other Gilbert-owned office space.

Or you might prefer the new Las Vegas being guided by Tony Hsieh, using $350 million of his own money, because he deeply believes that some of the best ideas come from the unplanned interactions of dissimilar people.

He has brought 12,500 employees with him to downtown, and along with other private investors is funding the construction of a light-rail system that will connect the central business district with the neighboring Midtown district. (…) Around the same time, the Las Vegas city government was also about to move, and Hsieh saw his opportunity. He leased the former City Hall — smack in the middle of downtown Vegas — for 15 years. Then he got to thinking: If he was going to move at least 1,200 employees, why not make it possible for them to live nearby? And if they could live nearby, why not create an urban community aligned with the culture of Zappos, which encourages the kind of “serendipitous interactions” that happen in offices without walls?

One thing all of these areas have in common is diversity; because living costs are lower their populations reflect real-world attitudes and concerns, as opposed to the more homogenized views of the wealthy, super-educated white males that dominate the Bay Area.

More on them next Tuesday.

Image credit: HikingArtist

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Entrepreneurs: the Importance of Intros

October 23rd, 2014 by Miki Saxon

https://www.flickr.com/photos/andrewbasterfield/5543166503I was reading Mark Suster’s Both Sides of the Table about how Seriously came to be funded.

It’s a good read, as most of them are, but towards the end he says something that is both a fact and a fault in funding.

So I hope that offers you insights into how companies move through the VC system. Intros. Vision. Domain Knowledge. Clear path to execution. Ability to build without a massive budget. Execute.

The bold emphasis on ‘intros’ is mine, because they are why many valid, worthwhile, game-changing startups will not get funding.

No matter how brilliant, the founders are outsiders and/or don’t fit the accepted profile.

In short, they don’t fit investor bias.

But mostly, they don’t have the connections who are able to pick up the phone and evangelize to someone like Suster.

All of which means that the pool of fundable startups keeps shrinking.

Flickr image credit: Andrew Basterfield

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Legalized Corruption

October 22nd, 2014 by Miki Saxon


I rarely write about politics, but it’s that time of year; I live on the border between two states and have to listen to political ads from both. So please, if this post offends you accept my apologies and wield your delete key.

My feelings are driven by the smugness I see across the political spectrum irregardless of parties and beliefs.

Smugness regarding the rarity of corruption in the US vs. its prevalence in other countries.

The way I see it, corruption in the US is rare primarily because it’s been legalized in the form of lobbying and PACs.

Lobbying has long influenced legislation, but as of 2010, when the Supreme Court effectively eliminated restrictions on outside groups, elections themselves went up for sale.

If you doubt me look no farther than the Americans for Prosperity, owned and run by the Koch brothers, which will spend at least $125 million this year, and the growth of super PACs overall.

In 2000, outside groups spent $52 million on campaigns, according to the Center for Responsive Politics. By 2012, that number had increased to $1 billion. (…) In 2014, as of early October, when the campaigns

had yet to do their big final pushes, overall spending was already more than $444 million, according to the Center for Responsive Politics. Roughly $231 million was from the parties and their congressional committees, the rest from outside spending. The biggest chunk of that by far came from super PACs — more than $196 million.

What each of these wealthy individuals have in common is passion, but unbridled passion is the hallmark of the fanatic—and fanaticism paves the road to a closed mind—one that is evidenced by fear, hate and bigotry.

Legal corruption or not, voting is important—if for no other reason than not voting precludes your right to complain.

Or, as my mom used to say when faced with two bad choices, just “hold your nose” and vote against X as opposed to for Y.

And you can avoid the corruption by ignoring ads, whether pro or con, and evaluating candidates and issues in a holistic and pragmatic way that looks at what makes the most long-term sense.

Flickr image credit: DonkeyHotey

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Ducks in a Row: the Problem with Change

October 21st, 2014 by Miki Saxon


After 40 years the architectural profession isn’t any more open to women than it was.

In 1974, Ada Louise Huxtable, architecture critic for The New York Times, wrote that it was “appalling” that the institute’s national membership consisted of 24,000 men and 300 women.

Although women now account for half of all graduates of American architecture schools, they represent only 20 percent of licensed practitioners and an even lower proportion of partners in firms…

It took pressure from Millennial men in search of better work-life balance to force some law firms to effect change, in spite of the fact that losing a second-year associate costs $200,000 – $500,000 and nearly 50% of women lawyers quit.

Paying for women to freeze their eggs is the latest perk being offered, including by Apple and Facebook.

Many in tech believe that organizations such as Girls that Code and mentoring groups like WEST will change the dismal gender diversity numbers.

Facebook, Box and Pinterest announced on Wednesday that they have gotten together to launch a new mentorship program called WEST (Women Entering and Staying in Tech). The idea is to get more women interested in computer science, and to help them be prepared for the tech jobs of the future.

Google is ahead of the pack by taking a different approach and addressing unconscious bias.

Will any of these initiatives work long-term?


Because, other than Google, none address the need for cultural change.

Changing culture is hard and it needs to start from the top, which means that leadership must change its MAP (mindset, attitude, philosophy™).

But considering the example set by the architectural profession I’m not holding my breath.

Flickr image credit: Peter aka anemoneprojectors

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The Destruction of American Workers

October 20th, 2014 by Miki Saxon

https://www.flickr.com/photos/dpurdy/2954271099What’s going on?

Why is there such a disconnect between management and minimum wage workers?

A disconnect that goes beyond all logic.

A disconnect that treats low wage workers more like serfs.

Two weeks ago it was Walmart’s efforts to enforce a dress code at their employees’ expense.

Now it’s companies such as Jimmy John’s sub shops requiring minimum wage workers to sign noncompete agreements.

But who knows, perhaps there is a proprietary trick to spreading mayo that I’m not aware of.

California outlawed most non-compete clauses on the basis that people have a right to earn a living.

And then there is the sexual harassment of low wage women workers.

The study showed that women reliant on tips made up the highest share of those who had experienced harassment and that those who lived in states where the tipped minimum wage was $2.13 an hour (the federal minimum for tipped workers) were twice as likely to experience sexual harassment as those who lived in places where a single minimum wage standard applied to all workers.

Whether large corporation or small business, it seems that those in the upper levels, who are financially secure, place little-to-no value on those who actually keep their company running.

And as for morality, well, that comes down to whether more employers decide that basic human decency requires viewing their workers not as interchangeable cogs to be paid as little as possible and worked to the bone but as valuable partners in building a company for the long term.

Centuries ago, when describing the actions of leaders, Lao Tzu ended by saying,

To lead the people, walk behind them.

Today it reads,

To lead the people, walk upon them.

Flickr image credit: Derek Purdy

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If the Shoe Fits: Which Kind of Leader are You?

October 17th, 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_mIn an interview Robert Herjavec said,

If you can’t inspire the people around you, you are going to fail. If you can’t inspire the people around you, you should go sell real-estate, because that is probably one of the only businesses where you could make a lot of money working completely on your own. But I think if you want to build a great business, you’ve got to bring other people along, and nobody wants to be managed. People want to be led.

His comment reminded me of a post from a few years ago that I believe is worth repeating.

Ducks in a Row: Leadership or LeadershIt?

If you truly want a culture of innovation, then you also need to create a culture of leadership.

Last week I commented that if the ‘i’ in leadership is capitalized it changes leadership to leadershIt.

Whereas leadership can be a great motivator, leadershIt is a guaranteed demotivator.

Visions and other leadership functions done with an eye to self-aggrandizement aren’t likely to resonate whether done by positional leaders, leaders in the instance or those who aspire.

Last year I wrote

Because initiative and leadership are synonymous, leadership needs to be pushed out of the corner office and spread throughout the organization; doing so will encourage growth, creativity and innovation.

If leadership is the fertilizer then culture is the water, without which nothing will grow, and people are the seeds from which ideas come.

By spreading leadership evenly through out your company garden and watering regularly, leaving no unfertilized or dry patches in which a seed will be stunted or die, you assure yourself a bountiful harvest that will be the envy of your competitors. (Two follow-up posts have more on this topic here and here.)

This isn’t a new idea, just a new way of phrasing it; Lao Tzu said it best 4000 years ago, “To lead the people walk behind them.”

The one thing that remains constant in all these discussions is that you always have a choice—this time it’s between leadership and leadershIt.

Image credit: HikingArtist

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Entrepreneurs: Riot Games: Against Prevailing Wisdom

October 16th, 2014 by Miki Saxon


When Riot Games was founded in 2006 by Brandon Beck, and Marc Merrill it was done out of frustration. They wanted a game that would embrace fans desire to engage in that game, rather than being forced to dump it for a new version.

League of Legends was launched three years later; it was launched ignoring prevailing wisdom about how to make a game pay, i.e., no hardware, free download, players couldn’t buy extra power or skill for their avatars and time to grow organically.

“People told us when we started that if you don’t charge up front, or if you’re not selling extra power or stats, it won’t work,” Mr. Merrill said. “But that fails to account for the coolness factor. If you’re really into cars, you don’t mind spending $50,000 to soup up your Honda. That’s the player we’re tapping into.”

Riot now has 1500 employees and is on target to break the billion dollar revenue mark.

The company says there are now 67 million active monthly players around the world, and in August alone this crowd spent $122 million, according to SuperData.

Riot Games doesn’t have advertising on its site; it focuses totally on its users believing that if they are happy revenues will come.

“Whenever I talk to executives at Riot, it’s like a mantra: ‘Revenue is second, the player experience is first,’ ” said Joost van Dreunen, chief executive of SuperData. “The paradox is that by putting revenue second, League will be one of the very few games to bring in $1 billion in 2014.”

Moreover, although it isn’t paying off immediately, Riot Games is working diligently to build LoL into a major e-sports presence.

Dozens of those players are now in Seoul, at the fourth world championship. On Oct. 19, the finals will be held in a stadium built for soccer’s World Cup, with 40,000 fans expected and many times that number watching online. Last year, Riot Games says, 32 million people around the world saw a South Korean team win the Summoner’s Cup, along with a grand prize of $1 million, in the Staples Center in Los Angeles. That’s an audience larger than the one that tuned in to the last game of the N.B.A. finals that year.

And while most of Riot Games’ 1500 employees are in Santa Monica, the bulk of its players are in Asia.

Sometimes it pays not to listen to the experts.

Flickr image credit: Chris Yunker

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Hiring Mojo

October 15th, 2014 by Miki Saxon

https://www.flickr.com/photos/agiraldez/5535714052When filling an opening do you look for primarily for world-class skills?

Do you long for the person who can ‘hit the ground running’ with little-to-no time or assistance needed to come up to speed?

Are your hires generally successful in both productivity and longevity?

If your response isn’t an unqualified ‘yes!’ then maybe you’re ignoring the most important factor.

Attitude, which translates to cultural fit.

Or, as David Ogilvy puts it, hire for the 3 P’s philosophy: Performance, Promotability and Potential

By the same token, the hottest candidates don’t always grab for the biggest bucks or need to be the biggest frog in the pond; there are intangibles that resonate on a purely personal level.

Every boss craves a world-class team.

Every candidate wants to play on one.

World-class is achieved most quickly when attitudes align.

Flickr image credit: Alex Giraldez

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Ducks in a Row: the Reality of Culture

October 14th, 2014 by Miki Saxon


Washing dishes for Jeff was grueling, greasy work. But then again, making a pizza, or driving a truck, or baking a cake, or any of countless other jobs are not always enjoyable in themselves, either. Out of all the lessons I learned from that guy in the Pizza Hut tie, maybe the biggest is that any job can be the best job if you have the right boss. Danial Adkison

People work for people, not companies.

People quit people, not companies.

They accept positions because of the culture and leave when it changes.

Bosses interpret company culture; they improve or pervert it; they add/subtract/polish/tarnish it.

What bosses don’t do is pass it on intact and untouched.

Flickr image credit: Susanne Nilsson

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Traits of a Good Boss

October 13th, 2014 by Miki Saxon


I was never impressed with Steve Ballmer when he headed Microsoft.

I didn’t follow him closely, but based on what I read/heard he seemed opaque, bombastic, prone to management by edict and incredibly arrogant.

I could have missed it, but I never heard Ballmer admit a mistake, even with a debacle like Windows 8.

Admitting errors or missteps, being vulnerable and being open to saying “I don’t know” are all signs of a secure executive.

So far, that description seems to fit Satya Nadella, Microsoft’s new CEO.  

There are three things that we are thinking hard about when we think about Windows moving forward. We have to nail the user experience. It doesn’t mean one user experience for all form factors but consistency that makes sense when using any one of those devices. Let’s face it, we got some things wrong in Windows 8, and I feel very good about the progress we’re making, especially for Windows 7 upgrade into Windows 10.

The next area we’re thinking about is the IT component. Getting identity packaging, device management and data security right.

Lastly, the developer. We will have the Universal Windows Application platform.

That’s a far cry from the old Microsoft that built what they wanted, arrogantly assumed that everyone would love it—and wouldn’t back down when they didn’t.

Of course, no matter how smart or mindful people still end up with their foot in their mouth as Nadella did at the Grace Hopper Celebration of Women in Computing.

Mr. Nadella, the chief executive of Microsoft, suggested on Thursday that women who do not ask for more money from their employers would be rewarded in the long run when their good work was recognized.

Oops, not something that would ever be said to a man; actually, not the smartest comment anytime, let alone now, with the spotlight on the way women are treated in tech.

Twitter, of course, lit up.

But Nadella didn’t waste time before he said he was wrong and he didn’t dance or minimize.

“Was inarticulate re how women should ask for raise,” he wrote in a Twitter post. “Our industry must close gender pay gap so a raise is not needed because of a bias.”

Mr. Nadella went further in an email to Microsoft employees on Thursday night, saying “I answered that question completely wrong.”

He added: “If you think you deserve a raise, you should just ask.”

Secure bosses know when to back down.

And when to say, “I was wrong.”

They know when showing vulnerability is better than pretending invincibility.

They are willing to say ‘I don’t know’ and listen to whomever has the information.

They don’t always need to be right.

Flickr image credit: BK

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