It used to be that work was part of life.

As tech connectivity increased, it became more life is part of work.

Now, instead of a work/life discussion, it’s a work/work conversation.

A year ago I wrote about Millennial optimization and burnout.

This year engineers are talking about how founders take advantage of it and that working for a big company is a viable alternative.

It’s a convenient narrative for the founders and CEOs who count on employees to put in extra hours—often without extra compensation—in order to keep their companies afloat. (…) Basecamp founder and CEO Jason Fried noted on Twitter, “If your company requires you to work nights and weekends, your company is broken. This is a managerial problem, not your problem.”

Working extra long hours was considered the way to get ahead, but it was also the road to burnout.

So, what’s changed in a year?

The advice to get ahead.

Instead of working long hours, nights and weekends for others the recommendation is to use all those unpaid hours working for yourself.

The answer may vary depending on the specifics of your job. But in general, you’re far more likely to get ahead by channeling your enthusiasm and ambition toward your own independent projects—not the company’s. (…) That is, after all, how many founders and CEOs achieved their own success. (…) Other ambitious young people may find that the best way to advance their careers is to dedicate their free time not to the jobs they have, but to the jobs they want.

In other words, continue with the 80-100 hour weeks, just shift part of those hours to your own projects.

Great advice.

Doing so would mean there’s a second party responsible (blamable) for your depression/anxiety/burnout/atrophied social skills/blown relationships/etc.

The truth is that whether those 80-100 hours is for yourself, someone else, or split, they will ruin your health and, eventually, your life.

Image credit: andrew leddy

Poking through 14+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

First, Steve Wozniak’s comments from 2016 are even less true today than they were then. Secondly, money has become the all-consuming focus for most people regardless of profession, driven for some by necessity, but in tech more often by ego, stuff and an aspirational lifestyle. That said, startups as a source of wealth may be falling out of style, as you’ll see tomorrow.

Read other Golden Oldies here.

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

I only partly agree with Steve Wozniak’s recent comment.

“I think the money that’s been made has attracted a different kind of people looking at technology today and saying ‘Oh my gosh, I could maybe have a startup and make a bunch of money,’” Wozniak said. “And the ones that come out of business school, money’s the priority. For the ones that come out of engineering school, being able to accomplish and design things that didn’t exist before is their priority.”

 Woz gives too much credit to the engineers.

It’s not just the biz school crowd that’s focused on the bucks.

The money bug has bit a good number of techies, too.

Years ago, no matter their role, people joined startups because they craved the bleeding edge, whether software, hardware or services.

This was true of both tech and non tech. In the words of Star Treck, they wanted “to go where no man has gone before” — or at the least go there differently.

Today the journey is more about getting rich and/or making connections for the future.

For decades I’ve told clients, “The person who joins your company for money/stock/perks will leave in a heartbeat for more money/stock/perks.”

That hasn’t changed, if anything it’s just gotten more so.

Image credit: HikingArtist

Yesterday’s post focused on the importance of financial controls.

Unicorns focus on funding.

The “horses” talked about yesterday are focused on profit and building sustainable business.

But when it comes to valuation, founders often focus on just one number: the magic B (as in billion).

This was analyzed in great detail in a post from CB Insights last month.
On the 31% of unicorns that are worth exactly $1B, partner at Lightspeed Venture Partners Jeremy Liew wryly noted (via this tweet) that it’s “potentially not a coincidence.”

Investors are still enamored by founders with their fast talk and passionate visions to “change the world.”

However, enamored or not, when funding, investors focus closely on CYA.

Which is easy, since investors have all the leverage, because they dictate the terms.

This is what is happening to get that exact $1B valuation. Even if the fundamentals don’t justify the $1B valuation, the investors can lay on enough structure and terms to get the founders to a $1B headline valuation (while investors have the protections they need). With the $1B valuation, founders get:

• desired media exposure to attract talent
• bro-grats tweets
• conference speaking gigs
• a place on this list

Of course, it’s the programmers, marketers, sales and support who actually build the products that will pay the price for the inflated valuation.

In these exit situations, common shareholders, aka employees, get fleeced.

Harking back to 2015, money has tightened again and being profitable is at the forefront of founder thinking — mainly because it’s the focus of investors.

Stockpiling cash is at odds with the model of most venture capital-backed start-ups, which typically raise piles of money to spend on growing faster. Many investors are now pushing their companies to turn a profit.

Shades of déjà vu.

Image credit: Purple Slog

Poking through 13+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

Burn rate is why companies (and people) should budget. Unfortunately, budgeting is often driven by burn rate when it should be vice versa — as most learn the hard way. Hard, but not impossible, just ask the guy who went from a burn rate of over half a million a month to $15,000. Although this post is from 2016 when money was tight and focused on entrepreneurs, it applies to companies of any size, as well as people, no matter their income.

Read other Golden Oldies here.

Last summer David Bladow, co-founder and CEO of flower delivery startup BloomThat, had the worse kind of ah-ha moment after deciphering the company’s accounting — a self-described “convoluted mess.”

What he found was a monthly burn rate of $550K that meant the company would be out of cash in just 4 months.

That knowledge drove a laser focus to change.

Now instead of shutting its doors in November, its self-diagnosed death date, the startup launched nationally on February 3. The company that was burning through half a million a month is now down to $15,000 a month.

BloomThat did early what every founder should be doing now.

Yesterday Mark Suster wrote about how to figure the right burn rate for your company and last week we talked about doing more with less.

Actually, I think the tightening of funding is a very good thing, although it will create a certain amount of carnage, it will force founders and their teams to grow up.

If that sounds harsh, so be it.

Funding based on unproven future sales is driven by hopes that are heavily shaped by outside circumstances — circumstances beyond any founder’s control.

Sam Altman warns that funding is not a guarantee of success and in the next few years David Bladow, Andrew Wilkinson and dozens like them will prove that horses have the staying power that unicorns lack.

Flickr image credit: Tsutomu Takasu

Poking through 13+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

Last week’s look at the “new” Microsoft reminded me of a previous post that’s especially apropos in light of unicorn valuations crashing headlong into the reality of investor focus on profitability.

Read other Golden Oldies here.

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

Neither market cap nor valuation are cause for celebration.

Both are as ephemeral as morning fog.

Ask Microsoft CEO Satya Nadella his reaction when Microsoft became the most valuable company in the world for a few months last fall.

“I’m not one of those guys who says, ‘let’s celebrate some market cap measure.’ That’s just not stable.”

What does interest him?

The Microsoft-generated ecosystem.

“Our business model is about creating more surplus outside us. We will only be long-term success when the people are making more money around us,” he said.

This dovetails with what Bill Gates also believes, i.e., a company’s success is defined when the total value of the ecosystem around it is more valuable than the company that created it.

That ecosystem seems non-existent to the majority of founders of gig economy businesses, dating apps, social media, etc.

Or perhaps it’s just those with venture funding who are focused on growth at all costs.

That said, this post is dedicated to the founders who focus on building sustainable businesses/ecosystems.

As opposed to the fools who chase investment in lieu of revenue, celebrate valuation based on their last round of funding, and don’t care about ecosystem beyond its PR value.

Image credit: HikingArtist

Sounds like an oxymoron.

The world knows about tech’s love affair with, and misuse of, personal data. The continual ignoring, minimizing and excusing of hate speech, revenge porn, fake news, bullying, etc.

Then there is its totally irrational attitude/belief that people will be kind and good to each other online no matter what they are like in the real world.

Given the prevailing attitude, would a hot tech startup have a conscience?

So would a founder, a self-described “technology enthusiast,” create an AI app that went viral and then shut it down because of the way it was being used?

DeepNude was built on Pix2Pix, an open-source algorithm used for “image-to-image translation.” the app can create a naked image from any picture of a woman with just a couple of clicks. Revenge porn activists said the app was “absolutely terrifying.”

As to the above question, the answer is “yes.”

The DeepNude team was horrified, believing “the probability that people will misuse it is too high.”

“We don’t want to make money this way. Surely some copies of DeepNude will be shared on the web, but we don’t want to be the ones who sell it,” DeepNude wrote in a tweet. “The world is not yet ready for DeepNude.”

—deepnudeapp (@deepnudeapp) June 27, 2019

Pix2Pix was developed by a team of scientists, who now believe the industry needs to do better and not just release their work to the world at large.

“We have seen some wonderful uses of our work, by doctors, artists, cartographers, musicians, and more,” the MIT professor Phillip Isola, who helped create Pix2Pix, told Business Insider in an email. “We as a scientific community should engage in serious discussion on how best to move our field forward while putting reasonable safeguards in place to better ensure that we can benefit from the positive use-cases while mitigating abuse.”

One can only hope that the scientific community does, indeed, find a way to do good while avoiding the worst of the negative fallout from discoveries.

And hats off to the DeepNude team.

It’s really inspiring to see such a concrete example of doing the right thing, with no shilly-shallying or dancing around the decision.

But I do wonder what would have happened if either the developers or the scientists were beholden  to investors.

Image credit: deepnudeapp via Twitter

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

It doesn’t matter which side you were on regarding the recent shutdown, because you were probably effected.

Maybe it was you, a relative or friend. Or maybe a friend or relative of a friend who couldn’t feed their kids or pay their mortgage/rent.

People were angry; some wrote letters, most unloaded online.

The more entrepreneurial (opportunistic) converge on Café Press.

But one entrepreneur went much further.

Greg Miller, founder of Neuticles, a company that sells testicular implants for neutered dogs so they appear unneutered, used his own product to make a statement.

As the shutdown has dragged on – it entered its 34th day Thursday – he is preparing to send his product to all 53 Senate Republicans, plus Vice President Mike Pence, with the message: ‘We are demanding that you gain testicular fortitude and have enclosed a pair of Neuticles to help achieve the necessity to stand up against the sole interests of this rogue president.”

Miller’s company, based in Oak Grove, Missouri, will spend around $13,000 on mailing plus the cost of the product.

He knows that sales are likely to take a hit from his actions, so why do it?

“I just want them to get some damn balls and think of America, not their political party.”

Male or female, entrepreneurs are known for being tough, in other words for having cojones, i.e., balls.

Greg Miller certainly does — in more ways than one.

Image credit: HikingArtist

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

Why is it that  founders who start out by claiming they want to stand against evil, just connect people, give people a new way to earn, or in some way make the world a better place, so often morph, to be polite, into jerks?

Money? Power? Drinking their own media Kool-Aid?

All of the above?

Or is it that, as opposed to morphing, given the right circumstances, even if transient, they always were jerks?

People, especially in our age of self-branding, work hard creating their image, so when considering it, caveat emptor.

Because what you see ain’t necessarily what you get.

Hat tip to KG for sending me the quote.

Image credit: Shut The Front Door

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

Neither market cap nor valuation are cause for celebration.

Both are as ephemeral as morning fog.

Ask Microsoft CEO Satya Nadella his reaction when Microsoft became the most valuable company in the world for a few months last fall.

“I’m not one of those guys who says, ‘let’s celebrate some market cap measure.’ That’s just not stable.”

What does interest him?

The Microsoft-generated ecosystem.

“Our business model is about creating more surplus outside us. We will only be long-term success when the people are making more money around us,” he said.

This dovetails with what Bill Gates also believes, i.e., a company’s success is defined when the total value of the ecosystem around it is more valuable than the company that created it.

That ecosystem seems non-existent to the majority of founders of gig economy businesses, dating apps, social media, etc.

Or perhaps it’s just those with venture funding who are focused on growth at all costs.

That said, this post is dedicated to the founders who focus on building sustainable businesses/ecosystems.

As opposed to the fools who chase investment in lieu of revenue, celebrate valuation based on their last round of funding, and don’t care about ecosystem beyond its PR value.

Image credit: HikingArtist

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

For years the media has been proclaiming that the great majority of young people want to be entrepreneurs or work for a startup, as opposed to a larger/older company, because startups were “cool.”

Now it looks like their ardor is what’s cool, as in cooled off.

Research suggests entrepreneurial activity has declined among Millennials. The share of people under 30 who own a business has fallen to almost a quarter-century low, according to a 2015 Wall Street Journal analysis of Federal Reserve data. (…) Two years ago, EIG’s president and co-founder, John Lettieri, testified before the U.S. Senate, “Millennials are on track to be the least entrepreneurial generation in recent history.”

What changed?

Maybe they learned that wanting to and doing it are very different. That they will work far harder for themselves, even if they are well-funded, or that startups fail  far more often than they succeed (90% vs 10%).

A survey of 1,200 Millennials conducted in 2016 by the Economic Innovation Group found that more Millennials believed they could have a successful career by staying at one company and attempting to climb the ladder than by founding a new one.

But maybe there is something else going on.

Maybe they have figured out that the world doesn’t need another social network / dating app / review site / etc.

Maybe investors have realized that monetizing through ads isn’t a good road to sustainable profitability, considering the push for more European-style privacy.

Or maybe, just maybe, reality has reared its ugly head and they’ve figured out they don’t have enough experience or know enough to create enterprise solutions for real-world needs.

Matt Krisiloff, the former Y Combinator executive, added that the opportunities “to start compelling start-ups,” for college students without industry-specific knowledge, “has vastly shrunk.”

Maybe they aren’t all looking for a safe harbor in the next downturn (there aren’t any), but for the experience that will ground their startup in their 40s, 50s and beyond.

What they found is that the average age of a startup founder is about 41.9 years of age among all startups that hire at least one employee, and among the top 0.1 percent of highest-growth startups, that average age moves up to 45 years old. Those ages are taken from the time of the founding of the company.

Maybe our media-inspired view of entrepreneurs is a reflection of the warped views of Silicon Valley as engendered by VCs.

VCs believe they have “pattern recognition” abilities that they simply don’t have. Instead, they rely on suppositions and stereotypes that don’t match the underlying data on startup success. The same reason why older founders are ignored by the ecosystem is the same reason why women and other minorities struggle in the Valley: It’s really not about what you build, but what you look like while building it.

Maybe the entrepreneurs of the future will look more like our real world in all its diverse, messy glory.

And a final “maybe.”

Maybe there is room to hope.

Image credit: HikingArtist