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If the Shoe Fits: a Tale of Two Startups

Friday, April 29th, 2016

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

5726760809_bf0bf0f558_mThis is a short post, because one of the linked articles is long and both are critical reading if you are, or planning at some point to be, a founder.

Founded in 2007, Powa Technologies is the perfect poster child for everything an out-of-control founder can do — from raising just over $200 million in debt and equity in less than three years, giving Powa unicorn status, to sending it down the drain.

At best, the collapse of Powa looks like a wildly overambitious attempt to force consumer behavior to match the ideas of a self-styled visionary. At worst, Powa seems to be a case of willful ignorance and a failure to acknowledge serious shortcomings, at a cost of hundreds of millions of dollars to investors and hundreds of jobs for staff.

NGINX (pronounced “engine X”) started as an open source project in 2002 and became an actual company in 2011. Today powers 49% of the top 1,000 busiest websites in the world, including NASA, GoGo Inflight Internet, WordPress.com and Wikipedia. Since then it has raised only $41 million in 4 rounds and although its core product is still open source, it is generating substantial revenue from its paid services.

To actually make money, Nginx has a few menu items. First, Nginx Plus, an actual paid-software product that goes beyond the free version and offers customers deeper tools for managing their web apps.
Second, it has a consulting business, where its team of experts go in and help customers install and manage their Nginx-based architectures. That’s especially important as companies move toward microservices, which can be a bold new world for companies used to building software the traditional way. That business is growing quickly, Robertson says, with 300% more revenue in 2015 compared to 2014, though Nginx doesn’t disclose specific financials and he declined to comment on whether it’s profitable.

However, neither the investment nor the revenues have led to the typical lavish, San Francisco startup style.

Still, Nginx is keeping things fairly lean. Even with all of those users, its headcount only broke 100 recently, Robertson says, and the company tries to avoid “bloat” by adding only those features that users really need.

Read the articles.

Understand the actions and reactions.

Absorb the lessons.

Just be sure to sort them correctly.

Image credit: HikingArtist

Ducks in a Row: Falling Star Marissa Mayer

Tuesday, January 19th, 2016

https://www.flickr.com/photos/98714794@N08/15815120475/

There is nothing wrong with Marissa Mayer’s compensation.

Yahoo! Inc.’s Marissa Mayer was the country’s highest-paid female CEO. The 39-year-old was awarded $59.1 million in 2014, making her No. 3 among the eight women on the Bloomberg Pay Index…

However, there is a lot wrong with Marissa Mayer’s performance.

The problem is, as As Wally Bock succinctly said last year, “We live in a world of microwavable answers and quick fixes” — and bosses see stars as quick fixes,” and Yahoo’s board thought Mayer the star would quickly fix Yahoo.

Hiring stars is often a function of bragging rights, better known as “mine’s bigger than yours.

But in a world where where people want star status in order to brand themselves, boards and bosses would do well to remember that they don’t come with any kind of money-back guarantee — in fact, they more often come with some kind of golden buyout.

Most star performers are a product of the ecosystem in which they perform. Change the management, culture, especially culture, or any other part of that ecosystem and stars may fall.

And never forget that that ecosystem is permeated by that insidious little detail that impacts success and is so often ignored in discussions — the economy.

As everyone knows, Yahoo isn’t Google, so…

A rising star at Google has become a falling star at Yahoo.

And a lesson learned for thinking bosses at any level, especially those responsible for hiring  executive and strategic talent — the past is no guarantee of the future.

Flickr image credit: Tim Spouge

Golden Oldies: Are you (in)competent

Monday, January 18th, 2016

It’s amazing to me, but looking back over nearly 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.

This particular Oldie is one of my favorites; probably because it poked such large holes in all the giant egos back in 2000. And it should do the same thing to the even larger egos walking around today. Read other Golden Oldies here.

Gotcha! I see all you readers twisting your arms in order to pat yourselves on the back because you know that even though you could improve at least you’re not incompetent.

Are you sure of that?

Way back in 2000 I read about research that stuck in my mind, an unfortunate reminder to me that I’m not nearly as good/smart/interesting/funny/etc. as I’d like to think I am.

It was done by Cornell’s Dr. David A. Dunning, who describes his research in the field of social psychology this way, “My social psychological work focuses on two related phenomena. First I am interested in why people tend to have overly favorable and objectively indefensible views of their own abilities, talents, and moral character. For example, a full 94% of college professors state that they do “above average” work, although it is statistically impossible for virtually everybody to be above average. Second, I am interested in how people bolster their sense of self-worth by carefully tailoring the judgments they make of others. That is, people tend to make judgments of others that reflect favorably back on themselves, doing so even when the self is not under explicit scrutiny.”

According to the research, “most incompetent people do not know that they are incompetent. On the contrary. People who do things badly are usually supremely confident of their abilities — more confident, in fact, than people who do things well…One reason that the ignorant also tend to be the blissfully self-assured, the researchers believe, is that the skills required for competence often are the same skills necessary to recognize competence.”

Isn’t that encouraging.

How bad is it? “Asked to evaluate their performance on the test of logical reasoning, for example, subjects who scored only in the 12th percentile guessed that they had scored in the 62nd percentile, and deemed their overall skill at logical reasoning to be at the 68th percentile.”

However, since the skills that make you competent are the same that you use to evaluate your ability, if you’re good at something you’ll know, right?

Wrong! “Unlike unskilled counterparts, the most able subjects in the study were likely to underestimate their competence.”

So, damned if you do and damned if you don’t.

The research did find that, “…a short training session in logical reasoning did improve the ability of low-scoring subjects to assess their performance realistically…”

But if you don’t know, why would you get the training? Or should you get it as preventative medicine.

Or maybe, just maybe, you should actually start listening to those around you and really hearing what they’re saying—even if it’s not complimentary, makes you uncomfortable and you don’t agree.

It doesn’t mean that “they” are always right, but if multiple people are all saying (by word or body language) the same thing, it’s very likely that they know something about you that you don’t know.

Listen, learn, think, change.

If the Shoe Fits: Founder Ego Can Kill Your Company

Friday, December 18th, 2015

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

5726760809_bf0bf0f558_mIf you truly want to succeed it’s important not to let your ego get in the way.

Or, as Marva Collins said, “If you can’t make a mistake, you can’t make anything.”

During the first startup boom in the Nineties it was called “founder ego,” but there were those, such as me, who just called it stupid.

Perhaps there is a new term I haven’t heard or it’s gone underground, but founder ego sinks more startups than you can imagine.

The thing to remember is that you

  • don’t’ know more than everybody else; and
  • can’t do everything better than anybody else.

You will screw up, you’re human, but people will think more highly of you and trust you more if you admit it and move forward by unscrewing it no matter where or who the solution comes from.

Thanks to Wally Bock at Three Star Leadership for sharing Collins’ quote.

Image credit: HikingArtist

Ducks in a Row: Losing One’s Humanity

Tuesday, November 17th, 2015

https://www.flickr.com/photos/28914176@N08/8135603742/

I’ve been writing a lot about Silicon Valley culture and, since I don’t live there any more, I usually cite/link to articles from those deep in the tech world who do or who write me directly.

Yesterday a question came in on my Quora feed that asked about the differences working in SV vs. the rest of the country.

If you ever wondered if media descriptions and commentary were hype, propaganda, sour grapes, ignorance or a combination thereof, then you really should take time to read the responses, especially Ken Miyamoto’s.

Miyamoto is a non-tech guy who, at the decrepit age of 39, moved to SV and ended up working for “one of the the most badass and innovative tech startups.”

We have this culture of brilliant kids that have a power that they can implement from a numbers perspective, but often (not always) fail miserably at implementing from personality perspective, yes, but even more so from a social perspective within the workplace and anything involved with that. (…)

There’s a clear disconnect, socially. I don’t know if it’s the generation. I don’t know if it’s the inability to balance responsibility of  power and position or ego or what have you. But there’s clearly a disconnect. (…)

The SV is an environment that is overly self-serving, self-rewarding, with little to no practiced responsibility of the social aspect of “the game.”

Beyond that, the SV proved too often be an overly analytical and knee jerk reactionary culture. Here you have young kids thrust into powerful (big or small) positions and, well, they act like young kids.

So to me, the Silicon Valley is a perfect storm of brilliance, power, new culture, money, money, money, and utter lack of social responsibility at times. (…)

That’s the major difference. Going from student to “rock star” so quickly. It leads to ego, blindness, paralysis of analysis, etc. And that culture is ever-spreading with Venture Capitalists young and old ready and willing to profit from it. 

Too many of the tech crowd have lost touch with the rest of society, don’t possess the skills to re-enter it and don’t see this as a problem, but the long-term result of losing touch with humanity is to eventually lose one’s own humanity.

(Funny how one’s mind works. I’m not sure why, but writing this reminded me of Isaac Asmiov’s Foundation series. In short, the series tells the story of mathematician Hari Seldon, who spends his life developing a branch of mathematics known as psychohistory, a concept of mathematical sociology. It is disrupted by an outsider known as the Mule, who was not foreseen in Seldon’s plan, so there is no predicted way of defeating him. Although I can’t connect it directly to the current love of data analytics, I’m sure it does and highly recommend it to you.)

Flickr image credit: kristy

Star Creation

Wednesday, October 28th, 2015

https://www.flickr.com/photos/michaelpollak/8406100469/

Monday we considered the idea that a team can have too much talent, i.e., stars.

Bosses claim they hire stars because they are the rocket that drives a team further, faster.

I think many do it because they are lazy.

As Wally Bock puts it, “We live in a world of microwavable answers and quick fixes” — and bosses see stars as quick fixes.

Which, if you will excuse the bluntness, is really stupid for two reasons.

The so-called slow fix takes more effort, but provides far greater ROI.

And you, personally, do much better, and have more fun, with fewer regrets, building your own team of stars — usually the only things lacking in this approach are egos, prima donnas and drama.

A slightly offbeat story illustrates the kind of stars that can result­­­.

Faculty from Bard College coach a debate team from the Eastern New York Correctional Facility, a maximum-security lockup.

They recently beat the national and world champion Harvard team. They have also beaten the University of Vermont and West Point teams.

They are home-grown stars, since it’s doubtful that a world-class team of debaters were all incarcerated at the same facility.

The point of all this is that if you want to be known as a great boss, then be the coach who builds an extraordinary team, as opposed to being the one who hires shooting stars.

Flickr image credit: Michael Pollack

12 Steps to Being a Better Boss

Monday, August 10th, 2015

minims

As I said in June, Wally Bock is my hero.

The stuff he writes is loaded with common sense and practicality.

Best of all, his advice to bosses can be implemented at any level in an organization by individual bosses.

He’s also one heck of a writer, which, in my mind, moves him from gold to platinum.

I’ve added this post from last week to my collection of all-time favorites.

Minims for Bosses

Merriam Webster defines a “maxim” as “a well-known phrase that expresses a general truth about life or a rule about behavior.” Minims are different.

Minims aren’t well known. They don’t express a general rule about life. They’re not big important truths, just little things that will help you do a better job as a boss. Each minim is a one or two sentence distillation of a tip in my forthcoming ebook, Become a Better Boss One Tip at a Time. Here are a dozen.

  • The best way to “empower” competent and willing team members is to get out of their way.
  • Power isn’t something you bestow. It’s something you unleash.
  • Mistakes are the price you pay for better performance in the future.
  • Most performance issues are not self-healing. If you leave them alone, they will usually go from bad to worse.
  • Sugar-coating legitimate criticism robs it of nutritional value.
  • Creativity lives in those cracks in your schedule.
  • The example you set determines the behavior you get.
  • When you’re silent, you can listen and when you listen you can learn.
  • Distrust the abstract.
  • Most of your team members, most of the time, only need suggestions and informal direction.
  • If you mess up, fess up and fix it.
  • Great ideas are everywhere and the best way to find out if they work is to try them out.

As I said, clear, pithy, doable advice and, if you take a step back, solid common sense.

Of course, it only works if you’re willing to check your ego at the door and sit on your dignity.

Success Sans Ego

Monday, June 29th, 2015

4107732661_b2e4e7964e_m

What is the secret to getting ahead?

According to Mike Curtis it’s pretty simple.

“Look for opportunities, and shed your ego.”

Curtis should know.

After high school, he was working in a coffee shop when a company called iAtlas Corporation opened across the street.

He pestered his way into an internship that included acting as receptionist and answering the phones.

When Alta Vista (the original search engine) acquired it he chose to move to California instead of starting college.

After a stint at AOL and another company he landed at Yahoo where he was lead engineer for Yahoo Mail, with a team of 200 and a 2-window office.

The reason he left offers yet more sage advice.

“Make sure that one day whatever company you join is working as hard for you as you are for it.”

He went from an executive position at Yahoo to Facebook’s bootcamp sitting next to interns and new grads, hence his advice to drop the ego.

Now he’s a VP at Airbnb.

Quite a career path for a guy who skipped college before it was fashionable and worked his way up.
Flickr image credit: Celine Nadeau

If the Shoe Fits: the Cost of Distraction

Friday, March 20th, 2015

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

5726760809_bf0bf0f558_mWhat happens when you create a fast growing business that has unicorn potential, but it doesn’t fit with your personal dream?

Do you pursue both?

That’s what Ben Nash did and almost destroyed PCS Wireless in the process.

Nash had always dreamed of being a real-estate mogul, while PCS Wireless bought, fixed and sold old cell phones.

Glamorous real estate or mundane phone reselling — which would you chase?

“I was running around the business world trying to find myself. I got distracted with ego and shiny things. I lost money in real estate, but losing money isn’t the problem. That’s a minor issue. I’ve always personally made money. The issue was my energy and focus was going to my other businesses and not to PCS.”

Nash didn’t get himself back on track, his team did.

About two years ago, the PCS executive team sat Nash down and gave him the “are we going to do this or not?” talk. (It’s “very important to surround yourself with people who are smarter than you,” is how Nash describes his team.)

There are myriad distractions in life; everybody has them.

What’s important isn’t the distraction, but how you deal with it.

And how comfortable your team would be if it was necessary to sit you down for “the talk.”

Image credit: HikingArtist

A Response to Remember

Monday, February 23rd, 2015

http://en.wikipedia.org/wiki/Mister_Ed

Like most of you, I get a lot of email.

Maybe because I write not only this blog, but also creatively for clients, I tend to care about my responses.

The result is that every now and then I write something worth sharing beyond that email.

That’s what happened today.

A friend sent me an article.

My response was especially apropos considering the upcoming presidential election, which means months of being bombarded by candidates, talking heads, pundits, gurus, etc., on all forms of media.

That said, here is my self-described brilliant take on it.

Years ago there was one talking horse named Mr. Ed on TV. These days there are dozens of talking asses on all kinds of media.

Feel free to use it, although attribution is appreciated.

Image credit: Wikipedia

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