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

Last year I wrote that no one is a “self-made” anything, with backup from Arnold Schwarzenegger.

The media loves attaching the “self-made” label, shining a spotlight and making it seem that anyone willing to work hard enough can become a billionaire, or at least a multi-millionaire.

It’s not just all the people along the way, but also where you come from and how privileged your background.

The latest self-made billionaire is 21-year-old Kylie Jenner who claims the self-made title, because she didn’t inherit her company, i.e., bootstrapped it using her own money.

No help, did it herself.

Of course, that self-made label ignores a few significant factors.

Still, it’s obviously absurd to attach the phrase “self-made” to Jenner, who is part of the wildly successful Jenner-Kardashian clan. While she is clearly savvy about marketing and promotion, Jenner grew up in one of the wealthiest ZIP codes in the world with access to every advantage money could buy ― including years of self-promotion on a successful reality television show. The value of her makeup company lies in the celebrity she accrued via her family.

So is “self-made” more nature or nurture? According to new research from Sandra Black, an economics professor at the University of Texas at Austin, the answer is nurture.

The environment you grow up in ― the quality of education your parents can afford to give you, the investments they make in you, the relative affluence of your neighborhood ― is almost twice as important as biology.

It’s not a case of denying the success of Kylie Jenner, Bill Gates, Mark Zuckerberg, or Nick Woodman.

It’s a case of recognizing how the advantages they enjoyed reduced risk, lowered barriers, smoothed the road, and made the journey easier.

If you still doubt that parents aren’t a big deal and nurture doesn’t carry all that much weight, take a look at a currently breaking scandal over the lengths to which parents will go to get their kids into a top university.

Image credit: HikingArtist

Job hunting can be stressful, but also extremely rewarding should the right role present itself. You deal with learning about the culture, taking time off for interviewing, crafting the perfect resume, and finally going through the processes to come out on the other side with an offer. That offer can be well worth the stress of it all.

What if you had to do all of that with your current employer’s full knowledge that you were interviewing? Would you still go through the process? Does the risk outweigh the reward?

I actually had that scenario presented to me recently. I have a close working relationship with a hiring director at a company I would be open to working for. I love the culture, how they go to market and it would be a career boost for me.

In addition, since I have a close relationship with folks there, the role opening was presented to me versus me applying on a website and hoping they see me.

One problem though.

They asked that I tell my current employer first, before interviewing, so there is no conflict of interest (my current company does business with the target company).

I have been sitting on telling my boss now for five days. Each morning I walk in with a plan to tell him and each day I delay. I have prayed, meditated, asked for a sign in a dream that I am making a good decision in telling a current employer that I am interviewing before I even know if I have the role.

It has been a major stress for me as I know the move would be great, but I feel it’s too much of a risk to show my cards before I even know the outcome.

Today I even contemplated loosening my own moral code, pulling a Hope Hicks and telling a white lie. I was considering saying I had told my boss when in reality I wouldn’t.

Doing this, of course, may be small, but it starts the foundation on the wrong foot. It chips away at who I am.

I want the role, see a future and see a path forward. But through all my gnashing of teeth, I have not felt right putting my family at risk by saying anything to my boss.

The feeling helped me delay, because today I received a call from that director. He asked that I wait to tell my boss. He realized it didn’t need to be done and it wasn’t right of him to put me in that position.

Have you ever felt you had to compromise to get ahead?

Image credit: pixabay.com

What a joke.

The US startup ecosystem is complaining (more like ranting) that Rocket Internet is a copycat/cloner/, even scamster, because they are successfully creating new businesses in various parts of the world mimicking the business process of successful US companies.

But, as the Inc article and Rocket Internet’s CEO Oliver Samwer point out, copying is as old as business.

Samwer says he doesn’t mind being called a copycat. “Most innovations come on top of other innovations, if you really look at it,” he says. To Samwer, Airbnb’s suggestion that Wimdu is a “scam” is as silly as the idea of Samsung’s alerting customers about a Vizio scam of developing a similar flat-screen television and selling it for less money. “There’s always competition,” he says. “We win because we take our work very seriously.”

Let’s get serious, folks.

• Ford didn’t invent automobiles.
• Boeing didn’t invent airplanes.
• Apple didn’t invent computers, MP3 players or mobile phones.
• Google didn’t invent the search engine.

The idea that most Silicon Valley startups are original is hilarious.

In fact, many of the current service darlings were done on Craig’s List long before they were a twinkle in their founder’s eye.

There’s also a small company started by Jack Ma called Alibaba.com, which has many parts that mimic the same companies that Rocket does.

Not only that, but many of Rocket Internet startups are tailored for developing countries.

What I think has infuriates entrepreneurs is three-fold.

1. They didn’t think of doing it first;
2. even if they did funding wasn’t available in the US and finally,
3. Rocket Internet is a German startup and Germany, as we all know, is highly risk adverse.

It’s also incredibly successful.

Since its founding in 2007 by Oliver Samwer, and his two younger brothers, Marc and Alex, Rocket Internet has helped launch over 70 companies across 50 countries, generating a combined revenue of $4 billion.

Note that the $4 billion is revenue, not valuation.

It’s called success—whether you approve of it or not.

Image credit: Andrew Parker/The Gong Show

I attended the Founder’s Showcase last Wednesday, and found it tremendously interesting from several perspectives.  As a founder who has started several companies, of which a couple have been successful, it is really interesting to see how the startup and funding environment has changed.

The basic format of the Showcase is that companies are selected to pitch to a panel of VCs who then provide them with feedback and advice after having had a chance to ask questions after the pitch.  Just hearing the feedback from the panel was very interesting, but also to see the different types of companies that were being pitched.  There are a lot of very interesting startups out there…

After sitting through a day of pitches, feedback and interacting with other founders, my main takeaway is that things are getting a lot harder out there for founders who are not well connected in the Silicon Valley environment.  There are a plethora of good companies out there that have created interesting businesses and technologies.

To get funding today, it is not enough to have an idea.  It seems that what is required is to have removed a significant portion of the risk factors (technology risk, development risk, team risk, market risk and business model risk) from the venture to get an investment from an Angel or VC.

Professional and semi-professional investors (VCs and Angels) have so many deals to choose from that, of course, they will choose the ones that will bring the highest potential return.  And this has a strong correlation with low risk and rapid turnaround to the next funding round.  Having a completed product and some customer traction implies that much of the risk has been assessed and surpassed, making an investment very attractive.  If you don’t have a product and paying customers, know that this is what you are competing against.

Some time ago, it was easier to get funding based on an idea or a prototype, but this seems to no longer be the case in the majority of companies.  So founders have to be willing to sacrifice all the way to product and customers before they receive funding.

Another main takeaway from the Founder’s Showcase was the glaring lack of companies doing deeply technological things.

Most of the businesses presenting were essentially new business models with at web/app frontend for a particular industry segment.  Almost none of the companies were working on difficult technological innovations.

But speculation as to why this is must be left for a future post.

KG Charles-Harris is CEO of Emanio and a special contributor to MAPping Company Success.

There are many ways of taking a career risk besides making over-the-top bets for a financial business or starting a company.

Risk may be easier to spot these days, because decisions are no longer personal; more often they are crowdsourced, whether that means your spouse, close friends or 500 LinkedIn/Twitter/Facebook connections.

While spotting risk may be easier, evaluating that risk is much harder, because determining whether a risk is worth taking can’t be crowdsourced.

The best way to decide whether to take a risk or not is through worst case analysis, i.e., think about the absolute worst thing that could happen if you do it. Then think through whether and how you would deal with that result. If you can handle the worst result you go forward; if it’s too much you go back to the planning board.

It used to work every time, but these days fewer and fewer people are willing to think independently, so the input you get is unconsciously based on whether that person could handle the worst case result.

But they aren’t you.

Consider Beth Comstock, currently senior vice president and chief marketing officer at General Electric, who took a major risk that put her on the path to where she is today.

“I was at CBS, and it was rocking,” she said. Then she got a call from NBC, her former boss, offering her a position that involved being responsible for media relations and marketing in the news division. “I think the job had been available for a year. News was not doing well anywhere…. People were saying, ‘Why are you doing this?’ It seemed like career suicide.”

The ability to perform worst case analysis clearly, sans rationalizations, means you need to take time to accurately know yourself—not just the self you project to others.

Only you live inside your head and only you knows what really goes on there.

Flickr image credit: Michael Coghlan

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

I confess; I don’t do Facebook or Twitter, but I do watch TV at night when I’m doing stuff that doesn’t require full focus.

I watch enough to detest the lack of creativity in most ads, but I save my greatest antipathy for the drug ads.

Mostly because the images are in such opposition to the warnings.

Cymbalta (anti-depressant) is a great example.

It is being sold as a pain reliever for people with arthritis and uses the tag line, “Imagine you with less pain.”

All I can think when they say that is, “Imagine you with all the side effects.”

The ads focus on best case analysis and only list possible side-effects because the law forces them to.

There is no real risk analysis; the good outcomes are used as cover for the downside.

This works because most of us prefer to focus on the positive.

In a 2008 column about entrepreneurs and risk Bill Buxton said, “The most dangerous way of all to play it is so-called safe. Safe leads to atrophy and certain death—of spirit, culture, and enterprise. There is not a single institution of merit or worthy of respect in our society that was not created out of risk. Risk is not only not to be avoided, it is to be embraced—for survival.”

That hasn’t changed, but there is smart risk and there is dumb risk and you need to know the difference sans dogmatic belief in your vision and rationalization.

The best way to evaluate risk, whether of a drug, promotion, romantic offer, etc., is to give equal thought to three things.

1. Best case: what positives do I expect from this action? (no pain)
2. Worst case: what negatives do I need to consider? (side effects)
3. If the results of number 2 can be handled go forward; if not revise the action.

The problem is not risk; risk is good, as well as necessary, for you or any entity that wants to move forward.

But ‘good’ requires balanced evaluation of the best and the worst.

Option Sanity™ neutralizes excessive ISO allocation  risk.

Come visit Option Sanity for an easy-to-understand, simple-to-implement stock allocation system.  It’s so easy a CEO can do it.

Warning.
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Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

Flickr image credit: HikingArtist

Between the pre IPO media frenzy of hype and the post IPO media frenzy of angst we all need a break from Facebook-related news.

Not to mention a little levity on the subject, which John Flowers of McSweeney’s was kind enough to provide in the form of the prospectus of the next hot tech IPO.

Facebook beware; Ponzify will surely eat your lunch.

An “expert blogger” at Fast Company wrote a post about what large companies can learn from startups (next month she’s writing the flip side, i.e., what startups can learn from large companies.)

Here is her advice in a nutshell,

1. Startups are flatter; if you can’t flatten, delegate and empower.
2. Startups have tighter timelines; a mandatory deadline is a pretty good way to shut up any last-minute hesitations.
3. Startups value disruption; when a company is setting out to define their corporate culture “risk” should make an appearance right between “honesty” and “respect.”

All well and good, but not exactly new information.

At Davos, John Kao, who advises corporations and governments on innovation, said that training and discipline and improvised creativity are the yin and the yang of innovation and used Google and Apple as examples of the two approaches.

Useful information and stuff you can put to work in your organization, but not particularly electrifying.

One problem is that so much of the talk about innovation cites either startups or technology companies as examples of risk and creativity.

A more interesting example is the turnaround that’s happening at Barnes & Noble, although it’s still a work in progress.

But if you want an electrifying example of risk, creativity, innovation and success consider Esquire.

Yes, Esquire; a print magazine in an industry that most experts have written off as dead.

In 2011, a year when the magazine industry was flat to down a bit, Esquire was up 13.5 percent in ad pages from the previous year.

To put that in perspective, consider that in 2009 it lost 24.3% advertising pages as compared with 2008 and the brand was predicted to disappear in 2010.

What happened?

Esquire’s editor in chief, David Granger did lay off 20% of his staff and substantially reduce editorial pages, but what he did not do was fire the big name talent in favor of younger, i.e., cheaper, staffers.

He did not, as they say, throw the baby out with the bathwater.

And the staff responded with an outpouring of creativity.

For its 75th anniversary issue in 2008, right about the time magazines were heading off a cliff, he and his designers put together an “E-Ink” cover that flashed, right there on the newsstand. (See video below.)

On almost any given day there are dozens of articles on how to juice innovation and creativity, but I think the Esquire article stands out.

Not because it gives you a list of what is wrong or spells out what to do, but because it proves that just because the “experts” say that not just you, but also your industry, are dead doesn’t mean they are.

What truly innovative companies have in common is a culture that embraces a willingness to live or die by risking failure.

YouTube image credit: shusummit

Several years ago I read an article by Bill Buxton about risk; I think it’s worth reposting, because the article is as valuable today as it was then.

The Value of Risk

In an excellent post on risk, professor, researcher and author Bill Buxton says, “Entrepreneurs, like ice climbers, are often said to risk their necks. But there are ways to cut danger to sane levels—and some very good reasons to try.”

People often comment that both groups are, politely speaking, nuts.

After offering up a detailed explanation of ice climbing he comments, “…the four considerations employed by the ice climber are exactly the same as those used by the serial entrepreneur or the effective business person…”

They are training, tools, fitness and partners.

Buxton ends by saying,

“The most dangerous way of all to play it is so-called safe. Safe leads to atrophy and certain death—of spirit, culture, and enterprise. There is not a single institution of merit or worthy of respect in our society that was not created out of risk. Risk is not only not to be avoided, it is to be embraced—for survival.”

A quick and valuable read—whether you consider yourself a risk taker or not.

Training, tools, fitness and partners—those are the same considerations that make all parts of life not only successful, but worth living.

In a world moving ever faster, where 2008 is considered ancient history, it is worth recognizing that there is much wisdom to be found there.

Flickr image credit: http://www.flickr.com/photos/hikingartist/3000044567

No unifying theme or organized focus today, just an odd lot that I find particularly engaging.

We’ll start with James Cook provides some basic wisdom for living, “Do just once what others say you can’t do, and you will never pay attention to their limitations again.”

That advice goes hand in hand with these words from Rosalynn Carter, “If you don’t accept failure as a possibility, you don’t set high goals, you don’t branch out, you don’t try — you don’t take the risk.”

Failure is a passing state unless you’re dead—then it’s permanent. Jim Rohn hits the nail on the head when he says, “It is not what happens that determines the major part of your future. What happens, happens to us all. It is what you do about what happens that counts.”

In the course of daily living we frequently look at our neighbor and wish that we could trade places. When that happens remember what common wisdom tells us, “When the grass looks greener on the other side of the fence, it may be that they take better care of it there.”

On a more irreverent level is this from Stanislaw Jerzy Lec, who reminds us, “The only fool bigger than the person who knows it all is the person who argues with him”

And to round out the irreverent is this pearl from Winston Churchill,“…Man will occasionally stumble over the truth, but usually manages to pick himself up, walk over or around it, and carry on.”

Sad, but true.

Flickr image credit: http://www.flickr.com/photos/scuba04/388774775/