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If the Shoe Fits: Talent, Revenue and Bias

Friday, December 9th, 2016

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

5726760809_bf0bf0f558_mIf generating revenue is high on your list of important stuff, then knowing your market should be right up there, too.

Actually, the knowing needs to come first.

There is no way a 20-something, white male from an even slightly privileged background knows, let alone understands, the needs/preferences/desires of a Gen Xer, Boomer or older, let alone those of a different gender, race or economic status.

IDEO not only understands that, it hires accordingly and enjoys big payoffs.

The problem is bias.

Google is one company that has recognized the reality of bias and is actively working to counter it, as is Silicon Valley Bank.

The bank has already undergone unconscious bias training globally, which involves exercises including splitting into groups and assessing the merits of four different résumés, only to return to find they belonged to the same candidate — just with different names and genders attached. (…) with female names, for example, the groups were more likely to question the candidates’ credentials.

But it may go much further.

It is considering whether to remove names from job candidates’ résumés in a bid to prevent unconscious bias from its recruiters.

Bias is a serious problem, but you’ll never win against it if you believe that ‘they’ are biased and you are not.

It also helps to understand that bias, whether genetic or cultural heritage, is hardwired in our brain.

As a founder, you have the ability to shape the values, culture and bias of your company.

And you need to do it intentially.

Image credit: HikingArtist

If the Shoe Fits: Lessons From 178 Failed Startups

Friday, November 18th, 2016

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

5726760809_bf0bf0f558_mYesterday we looked at how dangerous it is to substitute what-we-wish for what-really-is and I promised you a look at startups that died as a result.

Which is what I’m going to do, but not by reinventing the wheel (there’s enough of that without a contribution from me,)

CB Insights put together a great list of 178 failed startups — why they failed as told by their founders or, occasionally, an investor — including links to the full articles.

I hope you take the time to read through, especially those that parallel your own markets, circumstances, etc.

Save the list as a reference; the lessons learned could keep you from stepping in the poo now or somewhere down the road.

Image credit: HikingArtist

If the Shoe Fits: the Stupidity of Crowds

Friday, November 11th, 2016

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

5726760809_bf0bf0f558_mHow much do you rely on the so-called “wisdom of crowds” when you’re making decisions?

Do you think for yourself or check everything, from where to eat to the best language to use, against the “wisdom of crowds?”

If this election taught you nothing else it should have taught you that crowds aren’t particularly bright.

Stupid is more accurate

When I wrote The Value of Thinking in 2013 I asked a simple question.

But what happens to the crowd when everybody stops bothering to think?

At that point the old saying, everyone has a right to be stupid, but some just abuse the privilege, kicks in with a vengeance.

In the March redux I said,

…crowdthinking has increased geometrically, while independent thinking, let alone deep thinking, has decreased in proportion. You have only to consider the questions on Quora and the crowd’s actions/reactions at any political rally to see just how bad it’s become.

From failed startups to Tuesday’s election the wisdom of crowds has led down more garden paths than can be counted.

But for the legion of readers who demand hard data to back up common sense I give you the words of Anand Sanwal and the data of CB Insights.

Can we please never utter ‘wisdom of the crowds’?
I know lots of management consultants sold corporations on this “wisdom of crowds” nonsense, but can we now stop?
Here is what the crowd thought of Trump’s chances over time.
Totally, utterly stupid crowd.
stupid crowd

 

 

 

 

 

 

 

 

Stupid crowds do immeasurable damage.

Image credit: HikingArtist and CB Insights

If the Shoe Fits: Regulations and George Hotz

Friday, November 4th, 2016

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

5726760809_bf0bf0f558_mStartups love to rail against regulations, claiming they stifle innovation.

Uber and Airbnb are two of the most aggressive fighting them, not to mention the loudest.

What do you think?

Do you believe that eliminating/diluting regulations would provide the necessary boost to bring innovations to fruition?

Uber and Airbnb brazenly ignored regulations and, when that didn’t work, took their fight to the court of public opinion, lobbied for legal change and sued.

Would eliminating regulations have made Theranos’ blood tests work and produced a better outcome for its customers?

Autonomous and semi-autonomous cars are another battlefield.

And for all its high-profile supporters, millions of people around the globe are concerned with safety —  with good reason.

Obviously, regulations aren’t all bad, especially when when the cost of ignoring or eliminating them could be measured in lives lost.

Regulations are something that startup CEOs need to deal with and most do.

Most, but not George Hotz.

When he received a letter from the National Highway Traffic Safety Administration found a third option — turn tail and run.

Comma.AI, a startup run by famous hacker George Hotz, has shut down its project dedicated to building a Tesla-like semi-autonomous driving system after a warning from the federal government. (…)  The cancellation was prompted by a letter Comma.AI received from the , which asked the startup to provide information to ensure the product’s safety or face civil penalties of up to $21,000 a day.

Considering the product was a $1000 DIY semi-autonomous kit the market would likely be huge.

It seems reasonable to me to ask for proof it was safe, just as Theranos was asked for proof.

However, unlike Theranos’ CEO, Hotz didn’t dance, blow smoke or wave mirrors — he turned tail and claimed a pivot.

Would much rather spend my life building amazing tech than dealing with regulators and lawyers. It isn’t worth it. -GH 2/3

— comma ai (@comma_ai) October 28, 2016

Maybe when you’re 27 and best known for hacking an iPhone as a teen and a PlayStation 3 a few years later that’s what you do when faced with authority.

Image credit: HikingArtist

If the Shoe Fits: Is It Really Failure?

Friday, October 28th, 2016

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

5726760809_bf0bf0f558_mA post on Medium from Alexis Tryon considers something that many entrepreneurs face, i.e., if your company fails are you a failure, too? She puts it like this.

If Alex = Artsicle
& Artsicle = Failure
then Alex = Failure

I saw this happen decades ago during every downturn and each resulting layoff. It happened to many people at Enron and other corporate debacles.

Not just to founders/executives/managers, but to workers at all levels.

And I spent enough time coaching, encouraging and working with them that I coined a term for it.

I called it ego-merge.

I’ve written about it several times, how to avoid it in 2010, not making your company or position your identity (which is what Alexis did), along with a way to combat it in 2013.

As bad as ego-merge is for “regular” people, it is much worse for entrepreneurs.

That said, they also have a psychological advantage in dealing with it, since if they didn’t have more-than-normal grit to start with they wouldn’t have become entrepreneurs in the first place.

Also, real failure isn’t about getting knocked down.

It’s only real if you don’t get up.

Hat tip to CB Insights for pointing me to Alexis’ post.)

Image credit: HikingArtist

If the Shoe Fits: Juxtaposition of Values

Friday, October 21st, 2016

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

5726760809_bf0bf0f558_mI’ve been talking, a lot in the last few weeks about the importance of values.

And more importantly, why/how they need to be embedded in your company’s culture to protect it as you grow.

Not just my thoughts, but links to business leaders and entrepreneurs who say the same thing.

The problem, of course, is that talk is fast and easy, while execution takes time and effort.

And that’s the reason  the result often looks like this.

https://twitter.com/CBinsights/status/788375800470990848?utm_source=CB+Insights+Newsletter&utm_campaign=942ceb88a7-TuesNL_10_18_2016&utm_medium=email&utm_term=0_9dc0513989-942ceb88a7-87432613

Image credit: HikingArtist and Thomson Reuters via CB Insights

If the Shoe Fits: Lessons From MailChimp

Friday, October 7th, 2016

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

5726760809_bf0bf0f558_mLast Friday I compared valuation based on investment vs. revenue with AppLovin as my example.

Put another way, it’s the difference between focusing on outside money and inside money, AKA, revenue.

“One of the problems with raising money is it teaches you bad habits from the start,” said Jason Fried, the co-founder of the software company Basecamp, who has written frequently on the perversions of the venture capital industry. “If you’re an entrepreneur and you have a bunch of money in the bank, you get good at spending money.”
But if companies are forced to generate revenue from the beginning, “what you get really good at is making money,” Mr. Fried said. “And that’s a much better habit for a business to work on early on, to survive on their own rather than be dependent on money people.”

That’s the approach embraced by 16 year-old MailChimp, with 2015 revenue of $280 million and will top $400 million this year.

As a private company, MailChimp has long kept its business metrics secret, but founder Ben Chestnut wants to publicize its numbers now to show the road less traveled: If you want to run a successful tech company, you don’t have to follow the path of “Silicon Valley.” You can simply start a business, run it to serve your customers, and forget about outside investors and growth at any cost.

Chestnut also doesn’t have a Silicon Valley ego, as demonstrated when defining the company’s values

I asked all of our managers and senior managers to help me out with them, and we came up with three: creativity, humility and independence.

and hiring.

I’m looking for that philosophy because I want someone to push me and make me better. I want people who are smarter than me, and who will push and fight for something they believe in while also respecting the values and unique nature of the company. We have to be creative in pushing our boundaries, but sticking to our values.

There is an interesting thread I find running through founders who bootstrap and build their companies by focusing on generating revenue, as opposed to fundraising and hypergrowth.

Both types have vision, focus, drive and grit, but, based on reading, those building their companies on internal money don’t seem to have the same need for validation — not of their vision, but of themselves.

Image credit: HikingArtist

If the Shoe Fits: Tesla Lawsuit

Friday, September 23rd, 2016

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

5726760809_bf0bf0f558_mYesterday’s post focused on Tesla’s hacking and the lack of focus on security by tech, which is serious.

Today’s post is also about Tesla and I think it’s hilarious.

First, two facts.

  • People who grow up in the US know that marketing language should not be taken literally.
  • KG tells me that there are more Teslas in Norway per capita than anywhere else.

But Norway isn’t the US.

Tesla is being sued because a number of Norwegians don’t think the product lives up to the hype.

Some 126 owners of the Tesla Model S sedan’s P85D performance version are seeking unspecified reimbursements after the model only reached 469 horsepower instead of a pledged 700 hp, said Kaspar N. Thommessen, an attorney at Wikborg Rein law firm representing the plaintiffs.

Elon Musk is having a very bad week.

Poor Elon.

Hat tip to AnandSanwal/CB Insights for pointing me to this story.

Image credit: Hiking Artist

If the Shoe Fits: Mike Rothenberg

Friday, September 16th, 2016

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

5726760809_bf0bf0f558_mIn the beginning the story of Mike Rothenberg, founder of Rothenberg Ventures, is the story of just how far a privileged background and pure chutzpah can take a 28 year-old.

“What if you could combine the service-model approach of Andreessen Horowitz, and the founder-first community building offline and online approach of First Round Capital, with the processing power and reach of Silicon Valley Angels, and the discretion of Floodgate and the judgment of Sequoia? No one else can make the claim that they are even building those pieces. That’s what we’re doing.”

But a lousy manager according to his people.

…a demanding boss who needed to sign off on all decisions including investments, yet rarely made himself available to do so.

Four years later it’s the story of how fast a privileged background, super-size chutzpah, plenty of swagger, negligent management skills and questionable actions can bring you down.

And the very gifts that enabled Rothenberg to start his fund and carve out a name for himself in the crowded valley venture scene — his youth, his Stanford and Harvard degrees, and his dense social network and splashy events — may have set the course for his fiasco.

Read the story.

Look in the mirror.

Review your track record and actions.

Eradicate any similarities.

Hat tip to Anand Sanwal for pointing me to this story.

Image credit: Hiking Artist

If the Shoe Fits: Rollercoasters and Responsibility

Friday, September 9th, 2016

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

Last week KG shared a quote from Marc Andreessen.

“First and foremost, a start-up puts you on an emotional rollercoaster unlike anything you have ever experienced. You flip rapidly from day-to-day – one where you are euphorically convinced you are going to own the world, to a day in which doom seems only weeks away and you feel completely ruined, and back again. 

Over and over and over. 

And I’m talking about what happens to stable entrepreneurs. There is so much uncertainty and so much risk around practically everything you are doing. The level of stress that you’re under generally will magnify things to incredible highs and unbelievable lows at whiplash speed and huge magnitude. 

Sound like fun?”

5726760809_bf0bf0f558_mIt’s likely Marc wrote this with founders in mind, but it applies to all employees, as well as those whose lives are connected in whatever way — spouses, kids, relatives, friends, etc.

Actually, it is worse for them, because they rarely have a full picture of what’s going on.

Sometimes that’s good; workers need to concentrate on their work.

But they also need to know when difficulties arise; they need to know if their job may be going south.

They need honesty and transparency from the person they’ve chosen to follow and whose vision they are working to make real.

It’s part of the social contract Matt wrote about a few years ago.

It’s Zach Ware’s focus about what to do when a startup needs to close.

It’s what the founders of Shift and WrkRiot chose not to do — to the total detriment of the people who trusted them.

It’s my recommendation regarding bad news.

It’s on you because it’s your rollercoaster, your responsibility to do the safety checks and your job to notify people before it jumps the track.

Image credit: HikingArtist

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