Recommending “The Founders Dilemmas” by Noam Wasserman

May 14, 2013

I’ve been recommending The Founder’s Dilemma by Noam Wasserman a lot these days. I like how Wasserman takes a his empirical study of 10,000-ish startups and looks for patterns.

The conclusion: People problems are the leading cause of failure in startups.

The patterns he focusses on are:

  • Career Dilemmas – Should I found? When? Why? With Whom?
  • Wealth vs Control Dilemmas – The finding that drives this is On average, the founders who keep the most control over their company make the least amount of money.
  • Founding Team Dilemmas – Solo vs Team? Friends? Roles? Rewards ( Equity Splits and Compensation), Hiring, Investors, CEO-Succession

Many of us have a few unique experiences in each of these areas, but none of us have this huge array of experiences. It is good to see that we’re not alone in our experiences and that there are other choices to make.

The Wealth vs Control Dilemma is a curious one to me. It really grabbed me when I read Eric Ries’ review of this book last year. It made me think of PMC-Sierra founder Greg Aasen right away. I always thought his “give up control” strategy was unique and only worked for him. But turns out, “it’s a thing”. A good “thing”.

The only “quibble” that I’ve found so far with this book is that “It’s not a practitioner book”. It’s a data driven study of startups. That’s not bad, just is what it is. How one chooses to “interpret” the data always creates some “tension”. It’s also “too logical”, if that makes any sense.

More Stuff


What Does Marketing Do? ( In Theory ) Make Selling Superfluous

May 8, 2013

Revisiting Drucker’s definition of Marketing — What Does Marketing Do? (Part 1) {2006}. Still Useful.
/enjoy.

Here are the highlights.

Theory

Let’s start by referring to Drucker. We get the following definition from pages 20 & 21 in “Essential Drucker“.

There will always, one can assume, be the need for some selling. But the aim of marketing is to make selling superflous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.

Here are some more supporting points from those pages:

  • Business has 2 basic functions: marketing and innovation.
  • Despite the emphasis on marketing and the marketing approach, marketing is still rhetoric rather than reality in far too many organizations.
  • True marketing does not ask, “What do we want to sell?”. It asks, “What does the customer want to buy?”
  • It does not say, “This is what our product or service does. It says, These are the satisfactions the customer is looking for, values, and needs.
  • Indeed, selling and marketing are antithetical rather than synonymous or even complementary.

Discussion — Overall, this is a very tall order.

How many products/services fit this bill? The product that comes to mind quickly is iPod. The iPod, and its ecosystem, illustrate just how difficult it is to get a product to sell itself. It’s iPod, iTunes Player, iTunes Store ( they solved legal DRM problem and got music industry on board), an O/S for multimedia, the CD ripper/burner, and more details. It’s taken ~ 5+ years to get going on all cylinders. It was obvious in the early years that people wanted music on the net ’cause Napster was such a huge thing. But making iPod mainstream, that is a work of pure genius (and loads of hard work). It was a good idea that was refined, refined, refined, and is still being refined. It’s like a non-stop loop of listen & react. ( I think the Japanese have a word for this “kaizen”)


Serious Stuff – The Burnout Zone

April 12, 2013

I wrote this “popular” post on “burnout” way back in 1Q2007. I Forget What 8 Was For? – What the !@#$ Does Marketing Do? I was amazed how many people spoke to me about it back then.

Sadly … Still very relevant. Here is some “burnout slideware” on the topic.

Full Text of “I Forget What 8 Was For? – What the !@#$ Does Marketing Do?”

I’d like to forget that I’ve experienced the following “pre-cursors to burnout” events too many times in the competitive technology industry.

  • Getting dizzy spells during a meeting.
  • Watching a colleague fall asleep during the weekly update.
  • Watching a customer fall asleep during a meeting.
  • Forgetting a close colleagues name.
  • Forgetting a bosses name.
  • Forgetting how I got to this meeting room.
  • Getting dizzy spells on the drive home.
  • Not being able to get out of bed for 2-3 days after a big conference.

These events are a way of life, they happen all the time. The unwritten rule of thumb is “Just play thru the pain like pro athletes” do. But in my reality the tech industry is “burnout central”. I see it too often. We forget that Pro Athletes don’t play everyday and the ones who have long careers take care of themselves very well.

Anedotal Evidence ( tech is a high risk environment ) — I know a handful of burnout victims whose symptoms were so serious that they had to make significant career changes. Most of them were marketers, none were VP and above. Not a large number, but depending on how I count, this is anywhere from 20 to 50% of some job categories. Note that these percentages include only the ones who have confided in me. Few people like to advertise that they can’t cut it anymore.

It is interesting that most statistics that I’ve read talk about this executive (VP+) dividing line as well. The most common explanation is that executives spend a lot more time reviewing the the “pros & cons” of projects, they have a lot more information, they are usually the first to “buy in” to programs, they are on the hook to “sell the program” downstream, and generally have more control of their environment. This does make some sense, but I’m still not sure about this explanation.

Being a “poster child” for burn-out has also put me in a position to constantly hear anecdotal comments from friends and colleagues all over the industry. I hear the following phrase too often, “there is sooo much of what you have in the valley”. These numbers are the same everywhere. I’m guessing that every tech worker has had a few scares along the way.

It’s Not Gonna Happen to Me ( wrong ) — I’m not saying that everyone should go out an quit their job now. I’m saying that you’ve got to be aware that you work in a high risk environment. You’ve got look at the example of Pro Athletes — take care of yourself if you want a long career. If you start having symptoms act on them quickly. Don’t let them slide. Better yet — be proactive.

It’s good to know how you react to stress, so that you can act on it. This is difficult, not everyone reacts to stress in the same way. Some people develop more physical ailments like rashes, back pain, numbness, etc. Another indicator is how you make decisions. Most managers take a test to see how they make decisions under stress. I forget the name, but its the one where the results are plotted on “triangle graph” – blue in top left, red in top right, and green on the bottom. You mark the point where you are with little stress and the point where you are under lots of stress. The “vector” then describes you under stress.

If you have a “long vector” it is relatively simple for you, and others, to determine when you’re are under stress. Unfortunately for me I am one of those people whose dots sit on top of one another — The Hub guy — I’m an ice man — no difference between stress and no stress. The good news — I play great under pressure — the bad news — this group is the most susceptible to burnout.

It’s Ok … Burn Out doesn’t last forever ( wrong ) — Unlike a cut or a broken bone, burnout often doesn’t heal well. It usually leaves a permanent “scar”. In my case I have effects that are analogous to a person who has had multiple concussions. My “concussions” are brought on by a combination of stress and situations which require me to follow multiple “threads” of conversation/thinking. In computer lingo I don’t “task switch” well ( if at all ). If I get myself into a situation where “task switching” is key — like a meeting or party I’ll slowly begin having difficulty following the conversation. If I stick with it I’ll soon begin having “concussion” like symptoms — starts with ringing in the head & can get as severe as near blackout.

In daily life this is confusing for most people I interact with because I look normal. In fact most people note — you look great. This is likely to be true since I’m down to university level clothing sizes. But just like a “Lindros or Lafontaine”, whose pro hockey careers ended due to concussions, I look like I can play. I want to play. But if I do play, I’m putting my long term health in jeopardy every time that I step on the playing surface :twisted: I have effects every meeting ( social or work ) that I attend. It never goes away.

Movin On – I put the Daedalus and Icarus picture above because it describes how I feel when I’m working with others these days. I have plenty of experience which can help people to fly. But this knowledge also allows them to fly too close to the sun. Just like I did :-(


Mandatory Nerd Reading – The Other Side of Innovation (Execution)

March 11, 2013


“Ideas are the easy part … delivering on an idea is the hard part. It’s a long hard journey – from imagination to impact” is the theme of the “HowTo Innovate Book” The Other Side of Innovation: Solving the Execution Challenge « Vijay Govindarajan, Chris Trimble To the books authors, VG & Trimble, Thank You for that. I’ve always found that delivering on an innovation is extremely challenging. Reading through this book was like poring salt in old wounds. It reminded me of all the screw-ups I’ve made and introduced me to many more. My first reaction has been to recommend this book to anyone I come in contact to. It is that good.

I really like how they position an Innovation Team within an existing business. It’s a partnership. They dig into the issues of the “relationship” between Innovation Teams and Corporate Staff. They talk about hiring outside employees. Why and Why not. They dig into Power Balance and Status Issues. They cover most of the “conventional” wisdom and either confirm or debunk it. Fantastic.

The second section of the book is “HowTo Run an Innovation Experiment”. I really like the implications of that title. It is enough to ruffle a few feathers. That is “Innovations are Experiments … they are not guaranteed, we’re doing this test because … we don’t know how to do it”. They introduce very good concepts and provide a few tools.

How Does It Fit With Steve Blank’s Leanlaunch Pad and Customer Development?

I’m a Steve Blank fan-boy and didn’t need another book on innovation, but I did find it on his blogs’ short-list of books to read. I was curious since he hasn’t added many books to the shortlist in a long time.

My first pass is that VG & Trimble are very synergistic with Steve Blank’s Customer Development and Leanlaunch Pad. They are Yin & Yang. The complementary nature is in the style of delivery and where they come from. VG & Trimble choose a more time honoured business school justification of “Innovation as an Experiment” via collecting a ton of data and synthesizing it. They provide a very good “wrapper” for understanding “Innovation as an Experiment”. This is in contrast to Steve Blank’s “Gonzo/Manifesto” style that “practitioners” prefer. That said everyone has to read both, especially your “evil twin”, if you’re a practitioner then you have to read VG & Trimble no matter how much you don’t want to, and vice-versa. In a nutshell, VG & Trimble’s data seems to validate the LLP “Innovation as Experiment” approach. They are friend.

The high-level stuff. VG & Trimble provide a high-level framework for innovation within an existing business – Intrapreneurship. They provide a solid justification for spending time on “The Team” and “The Experiment”. VG & Trimble are much more focussed on Intrapreneurs and that means that they have some amazing points on “relationships” between the Core Business and the Innovation Team. A lot of these relationship issues are similar to those between Investors and Startups, but many are very different. If you’re an Intrapreneur you really need to read the “The Team” section. It will make a difference.

The main differences are about depth & details in “The Experiment” section. Here I would say that VG & Trimble do a great job laying out the problem to be solved. They provide useful tools and processes. If you’re doing this for real right now, then you need that mental support right now. And if your “Experiment” requires you to get customers for your product then you’d better dig into The Leanlaunch Pad (LLP) process via the Startup Owner’s Manual for more detail provided by a “practitioner”.

Slideware & Chapter 1

More Reviews

These are both very detailed reviews.


Thank You! (e@UBC & Lean LaunchPad Volunteers )

March 8, 2013

I’d to thank all the people who made e@UBC’s LLP workshop so much fun. I think we’ve given momentum to something very important.

The Donors-of-Time

  • A big Thank You to all the donors-of-time that made this a reality.
  • It’s >90% of us!

The Instructors

  • Paul Cubbon and I seemed to click during our “first date”. Paul brought great pace, intensity, focus. and structure to the class. I really liked his addition of the Pulsepress back-channel and the results of him “advising” me to use “less time” in my presentations. He also bought me a bottle of wine! Thank You Paul.

The Mentors

  • Doug Johnson, David Fox, Dylan Gunn, Andre Marziali, Mario Palumbo, Chuck Hamilton, and Steve Morgan
  • A big Thank You. Your efforts were very visible.

The e@UBC student “staff”

  • Peggy, Hans, Tagg, and … I’m sure I missed someone else who did the setup and tear down. Thank You

The Teams

  • Wow! You all put in a lot of “sweat”. Thanks for the great effort. It made the workshop.
  • 3D Bio Printer, Achievement Builder, Axon, Dragonfly, Foosler, Lululemon, Urban Farming, Zenith Wind, and ZipThru.
  • I also want to acknowledge that the teams that didn’t make it all the way played an important role in this workshop. They also learned what they needed to learn.
  • ps. tip to Dragonfly for the personal “Thank You” card on the last day. It made my day.

The Guys Who Paid For It – e@UBC
Thank You!

The e@UBC Team

  • Anuj Singhal, Deven Dave, and the new guy Andy Talbot
  • Thank You for providing the support to make this happen.
  • Thanks for paying for this “great sandbox” that is LLP.

Parting Notes

  • … I’m getting used to the reality that I’m “Mr. Tough Love” ;-)
  • It’s a pleasure to have such a great platform, e@UBC, to donate my time to. It’s so great spending time with people who want to work! Thanks (again)

Why You Need To Think About Market Type (Leanlaunch Pad)

March 1, 2013

This is a modified version of a post from the current Leanlaunch Pad session.

One of the most powerful concepts that Steve Blank introduces is (Pages 112–124 )
Market Type (Pages 112–124 ). It is #11 Customer Development Manifesto , not a high number, but it is very important.

The 4 Markets are 1) Existing, 2) Re-segmented, 3) New, and 4) Clone. His writing provides a lot of dialog on discovering your Market Type and acting appropriately. He wants you to figure out what I’m about to tell you. You want to find a way to be in the 2) Re-segmented category. You’re Toast in 1) Existing and You’re in for the long haul with 3) New. I’m not going to talk much about 4) Clone other than than one of my students worked for Groupon-China. He told me that they did a ton of experimentation to find their demographic in China. The demographic used in North America did not work for China.

The basis for the decision You’re Toast in 1) Existing are Military rules, New Lanchester Theory Steve has adapted for business. Also Geoffrey Moore’s Crossing the Chasm – Wikipedia, the free encyclopedia implies the same thing. Steve’s view is stronger because he puts a quantitative metric in your face. If you want to attack fortified positions then you need to spend 3x your competitor. In business speak if you want to attack Microsoft you will need to spend 3x them. For a startup this is not going to happen. End of story.

The basis for You’re in for the long haul with 3) New is similar except that here your customers don’t know anything about your product and thus you need to educate them and this takes time. On page 122 Steve notes that New-market entries are by far the most expensive … It takes time. You’ll become an instant success in 7 Years.

What Does This Mean For You?

It means that

  • you can’t compete on existing market features and performance,
    you’ve got to create new features and new meaning for performance.
  • You can’t compete with an incrementally better product,
    you’ve got to create a new category.

It means that you’ll probably over-shoot into New-Market territory and you’ll need move closer to an existing market to gain near term revenue.

This is why the Day in the Life of the Customer or the Service Journey is so important to you. Many of you are very close to an Existing Market and need to find a way to Re-Segment it. You’ve really really got to solve a new problem. You have to really want to solve the problem. Your intention has to be to solve the problem. The incumbents will solve all the low-hanging fruit ( the incremental solution that can be determined with financial planning). You’ve got to solve the problem in a non-incremental way to enter the market.

Reference Material

Crossing The Chasm

Technology-Adoption-Lifecycle - Crossing The Chasm)
Technology-Adoption-Lifecycle – Crossing The Chasm)

Market Type ( Part 1 )

  • Pages 112–124Startup Owners Manual, Steve Blank
4 Types Of Market
4 Types Of Market

Market Type – Cost of Entry

Market Entry Cost
Market Entry Cost

Real Market vs Expectations Market — Your Investor Pitch

February 25, 2013

This is a modified version of a post from the current Leanlaunch Pad session.

One of the most challenging aspects of business today is that the financial world mostly lives in an “Expectations Market” (investing/gambling) and your success as a startup requires that you immerse yourself in a “Real Market” (servicing customers).

As you progress you will eventually need to develop an investor presentation. You will find that these people speak a completely different language than you. It’s mainly because they are “betting on you”. They are not interested in your work. They may say that you have a winner, and that is in context of …

They are interested in knowing that you are interested in your work and are doing it. They are betting on the likelihood of your ability to solve the problem you are working on.

Practicing Your Story in “Gambler Speak” is Important

So you need to practice talking about your work in these terms. The terms of an investor ( or much easier to understand .. that of a gambler). This is what the UBC Tech Ventures class has done very well. Mike Lyons is a master of mapping the “reality story” to the “expectations market”. His style is the opposite of LLP. That is start with what the “expectations” market wants to hear and do the work required to meet that. We are solving “real peoples” problems and couching that need in the words of the “expectations” market. They both end up in the same place. Each is valid. Each has been going on for a long time.

Some Reading – Roger Martin, Dean of UofT B School

Roger Martin, Dean of UofT’s Business School, has written a great book on this subject called, “Fixing the Game”. I highly recommend that you read the first chapter. It summarizes the world you will soon be dealing with. It’s good to know why people respond differently. You can meet them in kind. Show them why you are a low risk. Why can you do it better than the others. That’s what they want to know. They want low risk returns.

Fixing the Game: First Chapter here: http://reg.accelacomm.com/servlet/Frs.frs?Context=LOGENTRY&Source=source&Source_BC=72&Script=/LP/51327737/reg&


Web Sales – Readings & Links

February 18, 2013

This is a modified version of a post from the current Leanlaunch Pad session. It’s intention is to provide a set of “Introduction to Web Sales” readings.

Web Sales.

On the topic of Selling on the Web the Startup Owner’s Manual « Steve Blank is a great resource. There are a couple things extra that may help. The first is getting in tune with what the “Spirit of Internet Marketing” is, or could be. The second is that funnel development is an ongoing puzzle – there are lots of innovators.

The High Level – What is the Spirit of Internet Marketing

The best place to start is still Seth Godin’s Permission Marketing. The book has the least jargon and get’s to the core of what you’re trying to do. From this base of knowledge you’ll be able to extend to the many more modern takes on the subject.

Funnel Development ( more Customer Development fanatics )

Startup Owners Manual Web/Mobile Selling

  • Appendix C “How To Build a Web Startup: A Simple Overview” provides a very good primer. (page 541–547)
  • The Customer Relationship section (page 126–168 ) describes the Get-Keep-Grow funnel with adequate detail for Customer Discovery.
  • “The Acquire/Activate Customers Plan for Web/Mobile” is page 304–328 describes the Get-Keep-Grow funnel for Customer Validation.
    • The “Managing The Activate Plan” diagram (page 328) is a good summary of what you’re trying to do.

Physical Channel Needs the Web Too.

Physical Channel Products will also need an Online presence – “Online Tools for Physical Channels” page 302–303.


What is Sales? Recommended Readings

February 18, 2013

This is a modified version of a post from the current Leanlaunch Pad session. It’s intention is to provide a set of “Introduction to Sales” readings.

Let’s talks Sales.
I cover the positioning of a Sales department in a company by Steve Blank. The “Spirit of Sales” by Malcolm Gladwell on Ronco founder Ron Popeil. Sales books for Managers and for Sales people. I also add in Geoffrey Moore’s discussion of “innovation styles” available to companies.
enjoy.

Positioning of Sales vs Marketing, Engineering, Finance, Legal, etc

The Sharp End of the Stick « Steve Blank

In an early stage startup, instead of sales being up front, the point departments are likely to be product development and customer development. Later on in this same company’s life, sales will become the pointy end and product development moves to a supporting role. In other companies it may be that manufacturing or finance is the sharp end of the stick. In an IP licensing business, legal and finance are the sharp end of the stick. It varies by company and changes over time. There’s no magic formula but there are always “leading” departments. And all “leading” departments have some type of “consequence-based” feedback loops that make success or failure obvious.

The “Spirit of Selling” — Gladwell covers Ronco

This story is magic. Malcolm Gladwell’s coverage of Ronco founder Ron Popeil in The Pitchman captures the essence of selling products you love. Every product developer, marketer, or sales person needs to read this. In the end you can’t fake product love and knowledge. Ron Popeil knows his products because he lives with his products.

The “shocking point” is that this story is relevant to us all and yet Ronco is the “sleazy” television sales world. Many people simple will not read this and get upset with me for recommending it to them.

Sales Books

ProActive

I asked two extremely knowledgeable Sales people to recommend a sales book for me. From the VP of Sales I got Customer Centric Selling. I liked this recommendation because I had already read and liked Solution Selling by Bosworth. From the best sales person I’ve ever worked with I got ProActive Sales Management by Skip Miller

CCS Customer Centric Selling « Bosworth

I like both books, they’ll both make a difference in your work. It was very interesting the choice that each person made since each book has very similar themes. In the details each book services a different audience. So if you’re a sales guy looking for direct tips and a means for understanding corporate sales management go for ProActive. It’s feet are firmly on the ground of a sales guy. If you are a management type looking to understand sales systems go for CustomerCentric.

Personal Perspective – ProActive Sales Managment

ProActive Selling: Control the Process – Win the Sale: Amazon.ca: William “Skip” Miller: Books

Managing Perspective – Customer Centric Selling

Customer Centric Selling « Bosworth

Innovation Techniques — “Dealing With Darwin”

Geoffrey Moore’s – Dealing With Darwin does an amazing job discussing Innovation Techniques available to companies as they age. This book is recommended for “Intrapreneurial Teams”. For the rest of you it is nice to know. It provides a detailed discussion on why Product Innovation is the innovation style necessary for “young” startups.

Summary Points

  • The book is about managing innovation and overcoming inertia in established enterprises.
  • It’s major thesis is that most companies love to innovate but hate to take risk, the net result being lots of me-too innovations that lack economic impact because they do not have the force to distinctively differentiate their offers.
  • Its primary prescription is to pick a single vector of innovation and march so far down it that your competition either cannot or will not follow.
  • The book describes fourteen innovation vectors all told. Different types are privileged at different points in the category maturity life cycle, so that innovation strategy must adapt to life-cycle dynamics. The overall model is used to help management teams winnow down innovation vector choices to one or two and align the bulk of their investment behind that choice.

Riffing on Consumerization of Technology (@pmarca tech crunch interview )

February 6, 2013

Marc Andreessen On The Future Of Enterprise | TechCrunch is a “beautiful riff” on the Consumerization of Enterprise Software. If you’re in the technology business you’ve known this for a long time. The consumer problems are often “more technically challenging” than the Enterprise/Telco problems. Thus the consumer solutions are often very good at a fraction of the selling price. They are hard to ignore. For example, in networking hardware, audio and video usage in the home makes bandwidth much more important for consumers than enterprises. The enterprise desktop is easy to serve. While the home desktop and media center is hard. A Linksys EA6500 Router is a marvel. This is overkill for a small office and perfect for media centered home. The “new” thing for me is the extent to which this is now true and the myriad of solutions available. Wow!

More Banter

I love listening to Marc Andreesen’s manifesto style. Love ’em or hate ’em. There is a lot to be learned by this technology “State of the Union” post.

It reminds me of my past riffs on the Consumerization of Telecom Semiconductors. CommSemi Nightmares — 802.3 L3+ chips are just “a backplane device” « Iain’s Chips & Tech. I had a good time re-reading the post. It’s not for broad consumption. It’s an acronym deluge. It was for an audience of 5. Once a chip-nerd always a chip-nerd. C’est la vie. At least my intended audience read it.


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