Archive for the ‘Failure’ Category

Startup advice brilliance

October 21, 2009

A friend pointed me to a superb summary of advice for startups, specifically calling out the ways that advice can be flawed, along with some perceptive insights into how to identify advice that’s actionable and useful.  The post is by Eric Reis, and is appropriately titled The 10 Ways Startup Advice is Flawed

Eric’s pov is appropriately snarky, and at a macro level he calls out various ways that being lucky and being smart are frequently confused with each other.  Snarkiness aside, the really valuable point he makes is how important it is to be a critical thinker, in general.  The value of making your own assessment of the information you’re consuming, and not just accepting it.

I especially liked his point #6: Maybe the thing they did used to work, but it doesn’t anymore

I think about that a lot in my own context.  I was at RealNetworks back when it truly was pioneering this new phenomena of sending audio and video over the internet, and we owned that market.  In public we said we had 85%+ share of the market, but in reality it was closer to 95% for a good long time.

We called the shots, named the prices, dictated terms.  We muscled into and out of markets we cared about, aligned ourselves with titans of the technology landscape.

And then Microsoft showed up and we fought them tooth and nail.  It was a hard and ugly fight, which they eventually won (once they started paying attention).

Well, they won, sort of.  It was epic, and in a start-up kind of way, it was epic fun.  I remember picking a big fight with the Windows Media team on an internet media list-serve, where I’d just published some user research showing how people preferred our new video to Windows Media’s.

And Microsoft’s head of a/v technology posted to the list, accusing us of fluffing up the research, and he included a three page outline of the ways you could falsify/skew consumer surveys.  And it was so much fun to respond to the list , asking “how was it that Microsoft knew of so many ways to distort research?”

But I digress.

We each became so obsessed with each other we quit paying attention to what Macromedia was doing with Flash and what Apple was doing with the tight coupling of iTunes and the iPod.  So, while we were both wrestling in the mud pit, Apple and Macromedia left the building and started more interesting and lucrative businesses elsewhere.  And until that point the thing we did at RealNetworks really did used to work.

Eric’s “ten ways” are simple and insightful.  The hard part is putting them into action, in the moment.  My experience at RealNetworks is valuable to the startups I work with and talk to if and only if both of us are cognizant of its context.  And it takes discipline and a good dose of humility to walk the talk Eric is alluding to.

I know there’s a ton of stuff I did that was a product of luck and timing, and a lot that was a result of deliberate hard work and applied intelligence.  The hard part is being honest enough with myself to examine where those boundary lines are, to strip out the specific circumstantial knowledge from the generalized, truly durable knowledge.

So, let’s all get a good laugh out of Eric’s list, but also remember how hard it is to actually do what he’s suggesting.

Performance and an opportunity to explore it

October 2, 2009

The underpinning principle of this blog is “meaningful failure”, and what you can learn when you examine this critical juncture of where you fail and embrace what you can learn through that failure.

I’ve been seeking out others who share this interest, and last year I discovered Ross Bentley who runs a consulting business, Bentley Performance Systems, that focuses on improving performance for executives and interestingly, professional race car drivers.  That latter constituency intrigued me.  Failure on a race track has specific tangible implications that failure in business does not:  bent metal, physical harm, or worse.

Ross spends his time working with his clients on very personal elements of improving performance, along with more straightforward tools and techniques of planning and analysis.  His focus on who you are as a person I find interesting, the examination about what emotionally or psychologically may be holding someone back from achieving their potential is an area like failure where people are less comfortable speaking plainly and openly.

In the case of the racers and the executives the conversation goes in the same direction:  how can you best prepare yourself to be constantly improving, learning from success and failure?  He engages them in relevant and specific conversations focused on getting them to do to what they do differently and better.

And after this discussion, examination, and hard work the racers go to the track and the CEOs go to their offices.  In both cases they’re in environments where the information is flowing by, fast, and they need to make decisions and situation assessments rapidly.  And each ends up with a quantifiable data set telling them how well they performed: lap times & finish order, income statements & balance sheets.

Ross and I got together yesterday so he could share a research project he’s starting called Performance in the Workplace. He wants to to better understand how executives assess their own performance, and what affects their performance over time.

The research is nice and simple:  he’s asking them to fill out a short survey, once a week, and tell him how well they feel they’ve performed, and why.  You can participate in the project by signing up here.

What I like about his approach is that he’s not defining “performance” for the participants.  He’s letting them define it for themselves.  When he first told me about this my reaction was “that’s pretty subjective, why not quantify performance with metrics”?”.  But then I realized, that really misses the point.  When you’re trying to help people do better every day, metrics are the product of your performance, not the measure of it.

We run businesses based on a set of milestones, KPIs (key performance indicators) – “dashboards” – and these are important measures of the recent past.  And they’re critical – I’ve written about why a well documented operating plan and the corresponding assumptions are essential to managing your business.

But executives spend their days making decisions, asking questions, analyzing and assessing – and of course this results in metric-based results.  But not in the moment.  How do you assess the effectiveness of your performance while you’re making those decisions, asking those questions, digging into those numbers?

I think Ross is onto an interesting topic here.  What causes you to feel you’re performing well one day, and not so well the next?  Will the act of self-assessing performance help you, in and of itself, to become more effective and cause you to be closer to the top of your game?

I’m going to participate, because in my business, at best I get monthly or quarterly metrics from my companies in terms of valuations I can apply to rates of return – on paper – and it takes years to get to the point where you can convert the paper value to cash or stock you can sell for cash.  Daily performance is not at all quantifiable with metrics, but matters oh so much.

I’m sure I can learn something from this, and am eager to see how what he finds.

Truth is relative and changes with perspective

June 4, 2009

My post about ambiguity and alignment provoked some really interesting comments, which I wanted to circle back to.  One comment in particular got my attention

It was an observation that truth is relative and it changes with perspective.  At a certain level that makes sense to me.  Truth can seem to be defined by the winners of the battles, by the dominant doctrine, by the loudest voice. 

The person commenting also observed that because of the relative nature of truth “good people can make poor choices at the crossroads.”

And this brought me to realizing that not only is truth relative, it quickly gets intertwined with morality.

In startup companies I think this is super important.  We’re battling the dominant doctrine of the market, striving to fight or become the loudest voice, working so hard to win.  And we’re doing so under enormous, constant pressure.  Keeping hold of what you believe is true and right can be difficult when it seems like survival is the order of the day, every day.

So you might find yourself in an environment where the pressure is explicit and relentless to place your company’s interests ahead of your customer’s, or your investors.  What is true then?  Well, the Entellium duo felt it was true that if they missed their revenue forecast they’d be fired, and made some really poor choices at that crossroad.  The truth was certainly relative for them.

But the more I talked to my friends about this “truth is relative” conundrum, the more I seemed to be saying there is no real truth.  I was explaining it away.  And it shocked me.  My initial reaction was that the last place you want to go is to say there is no absolute truth.  But actually the more I think about it that’s where I do end up.  The truth in your daily life is completely relative, it’s not absolute.  Except that what it’s relative to is what’s true to you.

When I was at LSI Logic in the early days as a product manager I remember going on a sales call at the end of the quarter to help a salesperson close a huge deal.  We found ourselves seated across from the purchasing manager, who was the wife of the founder,  reviewing the terms of our proposal only to hear her ask for a gift.  She said “I’d like a Gucci purse”.  I heard it as a non-sequitur.  Maybe her birthday was around the corner.  I tried to keep the conversation moving, but it quickly dawned on me that the gift was separating us from this order.I looked over at the salesperson, and we exchanged nervous, and puzzled looks.   

The salesperson and I ended the conversation as quickly as we could, got up and left, I called my boss (using my spiffy “car phone”) and relayed what had happened.  I was in a turbulent state of mind.  We needed this order, and I just made the call to walk away from it.  He was disappointed, really disappoint we lost the deal but supported the decision to walk.  I was relieved to be in a company where we shared this same sense of right and wrong.

I’ve told this story a lot, to me it’s a pure ethics example – it’s the one I put on my business school applications (they all had a question like “Describe an ethical dilemma you’ve encountered and how you handled it”). 

Except I’ve repeated it to people I have first hand experience with and know to be people of solid integrity and had them say “Hmmm…not sure if I wouldn’t have just gotten the purse, and the order.”  And it made me realize I made my choice based on my personal “truths” and these people would have made different choices for their own.  And each of us would have felt like the choice was aligned with our morals.

Another friend told me this topic sent her to look up the meaning of “moral relativism” – that moral/ethical propositions are measured relative to their circumstances.  More important, that only personal subjective morality expresses true authenticity.  Your personal sense of truth = the authentic you.  The other person looking back at you in the mirror.

That means you have to know that person in the mirror really well to remove the ambiguity in what happens at the crossroads.  You need to have an intimate and unabashed knowledge of what you yourself believe to be true about yourself.  If you lack that, well the easier it will be for you to be seduced by or succumb to the loud voices, the accepted doctrines, the winners of the battles.

The collateral damage of a missed opportunity

May 21, 2009

Sometimes life just steps right in and provides an illustration of a key principle, almost as if on cue. My apologies for the length of this, but the topic merits it.

For those of you who have read my bio, you know that I work in Seattle but commute from a small town in the Midwest. There’s a separate blog post needed to explain why, but the town I live in is small enough for us to know everyone, and be very actively involved in our community.

Last week someone at our high school wrote racist comments, a death threat, and the names of a number of the black students at the school on a stall door in one of the boy’s bathrooms. No ambiguity here. Horrible, fundamentally unacceptable, reprehensible thoughts. Scary too.

How the school responded to this presents a crystal-clear example of how ambiguity + fear of failure = colossal missed opportunity for a community and for its students. And it offers a heartbreaking follow-up to my post last week about ambiguity and alignment of your principles and ethics.

Here’s what happened:

  • A death threat naming six of the high school’s black students was discovered on a bathroom stall door at around 2:30 pm last Thursday.

Here’s what was done:

  • The six students were pulled from class that same day by the administration, informed of this, asked if they knew of anyone who might have done this.
  • The next day the police department was pulled into this, and spent the day at the school investigating the incident.
  • This same day – the day after the discovery – the administration met with the six children’s parents.
  • A letter was finally sent home to students this past Tuesday, identifying this as a student safety issue, and stating that “racist or threatening behavior will not be tolerated.” You can see it here.

Here’s the issue. With one exception, what they did wasn’t wrong, it just could have been a whole lot righter. And bolder. And more educational, for everyone.

The one thing they did wrong? Waiting until the following day to tell the parents. My heart goes out to the parents of those six children when those kids came home and told them what had happened at school that day. How alone they all must have felt. I don’t need to dwell on the tragedy here, the local Fox affiliate got there way before me.

So, the police got called in to investigate, and a letter went out to the students and parents. A safety issue. My daughter summed this up well by saying it screamed ‘this is not our fault.’ I was profoundly let down, feeling decisions were guided by a desire not to fail, not to make a mistake, and to minimize the visibility of this incident.

Retreating to this being primarily a safety issue is a red herring. This is unequivocally a racism issue. And it’s not about the high school. It’s about the entire community. Whoever wrote these threats does not live at the high school. Any one of us may be running into this kid on a ball field, in a supermarket, anywhere. The school provided the medium for the expression, but those racist thoughts leave the school ground at 3:05 and go somewhere.

The school administration got the whole visibility opportunity wrong. They claimed raising visibility would satisfy “that person’s need to do it and maybe there is more that will happen.” Huh? I can’t think of a better way to ensure this doesn’t happen again than getting the entire school and community to get out in public, now, and express their opposition to this kind of behavior.

And “out in public” is where the six students and their families need to feel supported, and safe. These six children and their families should feel comfortable knowing more than the school and the police are looking out for them. Worse, time matters here, a lot. These children and their families needed that support the moment this was discovered. Importantly, the opportunity for members of the community to show their support in a timely manner was also taken away too.

What if the actions were guided by a fear of not succeeding? Success is not about catching whoever it is who wrote the graffiti. It’s about demonstrating unambiguous intolerance to racism, in the school system and community as a whole.

How could this have been handled differently?

  • They could have held a school-wide assembly to inform the students not of the threat as much as of the intolerance of racism. Of the vigilance to eradicate it.
  • They could have called a joint City Council-School Board emergency public meeting to shine a bright light on these two institutions’ intolerance to racism and vigilance to eradicate it.
  • They could have held a community-wide rally to ensure no one missed an opportunity to show support for these children and their families.

Hiding this or minimizing its visibility means that if whoever it is who made these threats is never caught, then he or she or they will have won. Even if caught, the legal process will be conducted in rooms, in buildings, away from the community.

What a spectacular opportunity to bring the community together and shine a big, bright light on this. And what a colossally great learning opportunity, missed. My daughter is taking a “Race, Prejudice, and Intolerance” class in that very school, right now. Holy cow, why not get the entire student body in on a real-time lesson. How many people can say they’ve taken part in an anti-racism activity, as a student, in their own school?

And that list I came up with about how this could have been handled differently? It can all still be done too.

And this isn’t personal or about the people involved. It’s about the direction they chose. I know the school principal and many of the school administration and teachers. These are smart, caring, very hardworking people. People that make you proud that they do what they do to provide a great education for our kids. That’s why it’s so heartbreaking to witness the straightforward, sensible path that produced this missed opportunity.

A fear of failure produced this. Nothing done wrong, but plenty of collateral damage, and six students, their families, and the community poorer for the experience.

Ambiguity and alignment

May 13, 2009

My last few posts have been very much “inside the world of vc and high tech” and I wanted to get back to the broader theme that underpins this blog – meaningful failure and what you can learn from failure.

I had one of those wonderful experiences last week where a friend connected me to a friend, and I subsequently found myself deep into a conversation I hadn’t expected.  In this case, I was on the phone with a former technology executive who left his career to pursue his passion for poetry.  There we were, getting to know each other, locating some common ground in our shared interests of startups and writing.

One of the subjects we lingered on was how whether you’re at work or at home, you’re the same person deep inside.  And that the converse is perhaps more interesting: what happens when you’re a different person at work than you are at home?  I was thinking alignment of values and areas of ambiguity.  This sent me in an interesting arc.

When I first started thinking about this I thought the issue was more about decency and less about ethics. 

Except people can be incredibly decent, treat others well, communicate compassionately and still be unethical.  They can define “truth” in a way that is not true at all, and exploit this ambiguity motivated by fear, or greed, or insecurity, you name it.  But it means who they are on the outside (defined truth) is different from who they are on the inside (actual truth) 

Which made me think of Entellium.  This is old news, but offers a rich example.

Entellium was a high flying venture capital backed startup in Seattle, where the CEO and CFO created a second set of financial statements that overstated revenue and presented these to their employees, board, and investors. Only these two executives knew about it, and they compartmentalized the truth, keeping it deep inside.  For a long time. 

John Cook of TechFlash summed it up well:  “More than $50 million in venture capital down the drain. Over 200 people out of work. And two Internet executives — both fathers — going to federal prison.”

They didn’t do it because of greed – they didn’t even profit from this deception.  In fact they ended up spurning a $100million offer from Intuit, knowing the fraud would come to light during the accounting review.  

One of the executives admitted the fraud was driven by the fear of failure.  A missed sales objective one quarter and the fear of confronting that caused them to overstate actual revenue.  And then the next quarter of course they were even further behind, and well you know the way these things play out.  So, they lied to their board and employees.

And to their families too, who were blindsided by the fraud.  The police showed up at their houses and took the execs away in handcuffs in front of their wives and children.  Imagine what was going through their heads, and the heads of their families in those moments.   And the comment I kept hearing from people who knew both men was “they were such decent people.”

So I guess you can be decent and have a very ambiguous ethical foundation.  In fact, the belief that your your ethical foundation has ambiguity is the tell-tale that you are no longer behaving ethically.  Entellium was all about the difference between what was true and what could be gotten away with.  There’s plenty of ambiguity to go around in those last six words. 

But deception is a whole number, there are no fractions of it.  There is no ambiguity.  So it’s really not about being a different person at work or home, it’s about always being the same person inside and outside.  Having truth be the connective tissue between the two.

David Foster Wallace said this well in his 2005 commencement speech at Kenyon College “The trick is keeping the truth up front in daily consciousness.”

If it’s up front, then it’s there for everyone to see.  A nice alignment between who you are inside and who you are outside.

Lots of low cost experiments

April 22, 2009

The really interesting improvements companies make come from takings risks, but in a lot of cases risk-taking can be held hostage by needing data to support every decision.  Being conservative and careful across the board may be safe, but it’s not where breakthrough learning happens.

This is where I see a lot of startups struggle:  confronting the tension that is created between knowing when to apply disciplined fact-based decision making to avoid failure, and when to be disciplined about making decisions where failure is accepted as a likely outcome.

The best companies create a culture that can foster two seemingly conflicting organization abilities: precision and failure.  In fact, you need both to reliably profit from your mistakes.

The key is understanding where in your business you can afford to routinely experience failure, and where failure has more costly significance.  You need internal processes that measure performance, coupled with a culture that has a pretty solid foundation of trust – where anyone and everyone feels comfortable taking a risk, and reporting the results as data.  I wrote on this earlier, it’s a culture where bad news has got to travel faster than good news.

Steve Blank wrote a pithy essay on how to navigate this decision making quandry and I love the quote he referenced from General Patton: “A good plan violently executed now is better than a perfect plan next week.”  This is a variant (or perhaps the inspiration) for another saying “the perfect is the enemy of the good.”

To me they drive home the value of action and experience placed on par with the value of planning and data.  Patton would never go into battle without a well thought through and justified plan, but he speaks to how perfecting the plan is different from winning the battle.

The same is true in startups.  It’s critical that they operate with a well thought through plan supported by data, but it’s equally important that they understand when the plan is no longer as important as what the real world is telling you.  It’s another way of understanding why the numbers in your operating plan are wrong, and is in fact healthy.

Steve talks about a simple heuristic, that decisions have two states: reversible and irreversible.  With the reversible decisions you can liberally experiment, and should.  This is where you can create significant breakthroughs for your company by being highly creative, and surprise yourself by taking risks, and failing, perhaps a lot.  If you’re wrong, re-load and try again.  For me the construct is learning to try “lots of low cost experiments”.

He makes an even more interesting observation about tempo.  It’s not sufficient to be able to take risks with reversible decisions, it’s to do so at a brisk tempo.  Quick, responsive, hungry.

Where this comes in especially handy is with sales and marketing performance and new product development.  In both cases you’re in a race to discover what works, and then what works on a repeatable, scalable basis.  I forwarded Steve Blank’s article to one my CEO’s who is focused on improving her sales and marketing team’s pace and performance.

Jenny Hall also made a similar observation in her post about what she learned as CEO of Trendi.com when it failed.  For her it was “if it won’t matter in three months, don’t spend too much time on it.”

She’s got the necessary ingredients: a culture of trust within the company, data-driven decision making, and performance measurement processes.  When she first arrived, these ingredients weren’t as prevalent, and she worked hard to put them in place, and placed a priority on reducing errors and increasing predictability.  But that was then, this is now, and she’s making the transition to fostering more appropriate risk taking as a way to increase performance.

Lots of low cost experiments combined with a brisk tempo supported by a disciplined acceptance of failure.  That sounds like a lot of fun.  Try it.

The next big thing

April 7, 2009

“What’s the next big thing?” I get asked this a lot, and a lot of VCs get asked the same question too about what’s the next big trend/device/web-service/… and that always makes for an awkward detour in whatever conversation preceded the question.  The truth is “I don’t know.” And it’s a great answer, because none of us do. 

The next big fill in the blank only becomes apparent in hindsight.  It’s not that I’m not smart nor anyone else who gets asked this question, it’s just that you can’t really tell.  Sure, I’ve got favorites (twitter is now at the top of my list, but I wouldn’t have said that a year ago). 

Remember when Google actually was in beta, in 2000?  It began appearing on people’s desktops where I worked at RealNetworks.  We thought it was cool and efficient, but there were ZERO people talking about it being the next big thing.

Last Thursday’s NY Times had an interesting article about the rising popularity of “netbook” computers, and how these are a big emerging phenomena enabled by a structural technology shift in the computing landscape: we no longer need Microsoft, and probably Intel.  The next big thing?  Maybe.  More on that in a second.  Let’s look at newspapers.

Clay Shirky did a phenomenal job explaining the collapse of the newspaper industry on his blog, pointing out it too results from a structural technology shift – the internet.  Clay references Elizabeth Eisenstein’s book, The Printing Press as an Agent of Change, where she observes that during these technological transformations the only obvious effect in the moment is the destruction of the status quo.  What transcends the status quo takes time to emerge.  Clay sums this up well: “That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place.”

In the case of netbooks, we’re about to see a lot of old stuff get broken, but it’s not clear if netbooks are the transcendent replacement, or just one of the convulsions of the revolution.

But netbooks are significant because they’re exploiting the growing vulnerabilities of Intel (price, performance) and Microsoft (price, legacy support, integration) at the low end in the same way that Apple is (more elegantly) exploiting them at the high end.

Netbooks have traction because they focus on where people spend the majority of their computing time: web-based documents and services, and the consumption of digital media.  That’s it. 

Whether or not someone buys one, netbooks educate the average citizen that GoogleDocs and a browser are all you need, and that MS Office is both irrelevant and overpriced.  My belief is the impact of netbooks will not be felt so much in unit volumes, but as catalysts speeding the unraveling the Office franchise. 

But wait, there’s more.  How much distance will separate the Office franchise “unraveling” from prying MS’s grip off the operating system?  Apple can’t do it, and is smart enough to steer clear of this outcome.  Will Android and Linux be good enough at the low end?

We’ve already seen the indifference that’s greeted Windows7, and the reluctance to even adopt Vista, with people scrambling to stick with XP.  My family did exactly this in February when our five year-old XP home computer died, and we scrambled to find someone who could sell us a new XP machine (we succeeded).  It was an intelligence test.  XP or Vista…hmmm.

Maybe this reveals a nuance to Clay’s “revolution” observation.  Perhaps the path to destruction takes you through the terrain of irrelevance.  What netbooks show us is how irrelevant the once mighty Microsoft and Intel platforms are to the needs of people today.  They may be lucrative businesses but they just no longer point to the future like they used to.  They’ve become what’s broken in the revolution. 

It’ll be exciting to see the new stuff that’s put in place.  I’ll be sure to blog about it, after we all see what it is.

Man On Wire – Best Startup Movie Ever?

April 1, 2009

I saw Man On Wire for the first time in February; I’d read a snippet somewhere about this being the story of the man who tight-rope walked between the two World Trade Center towers in 1974.  And at a certain level, that’s exactly what this movie is about.  It’s exquisite.  The tight-rope walker, Philippe Petit is almost a caricature, his vision and ambition equal parts boundless and focused.  I’ve seen the movie three times now, and each time it’s more revealing.

What viscerally strikes me is how it tells the story of starting up a company.  This is all about having an idea so audacious it’s almost not believable to someone who hasn’t drunk your kool-aid, yet.  It’s about staying focused on the one reason why you will succeed and not the 10,000 reasons why you will fail.

Man On Wire reveals four super-compelling principles that underscore what it’s like to be in a startup, and if you haven’t been in one, it’s a wonderful way to get a sense for what it feels like to be there:

  • A meticulously constructed plan, discarded.  Philippe Petit spent six years planning this act, including building scale models of the towers’s roofs, constructing a tight-rope the same length as the towers in a field, and on and on.  And guess what?  The day of the “coup” huge elements of the plan had to be thrown out, the real world just didn’t cooperate.  This is “why the numbers in your operation plan are wrong” writ larger than life.
  • Repeated visualizations of the outcome.  This is one of the critical mechanisms to ensuring you’re focused on why you will succeed.  Philippe from the moment he learned of the Towers construction, visualized walking between them.  For years and years visualized walking that wire, how he would do it and succeed. This is critical when you only get one shot at an opportunity, like he had. 
  • Significant emotional toll.  Getting something done that’s ambitious, with a visionary leader means you will do things that are difficult and way outside your comfort zone.  You will find out who the chicken killers are, who can be relied on and who can’t, and most importantly what you can rely upon yourself for.  It’s messy and painful, and you will be different as a result of this experience.
  • The fear of not succeeding.  Philippe’s obsession was on success.  Startups are all about being laser focused on why you will succeed, and your only fear is success NOT happening.  I just can’t say this enough.  People who are afraid of failure may very well get great things done, but just not at startups.

For me the most piercing and fiercely honest confession of the entire movie is when Philippe describes the moment when he committed himself to walking that wire.  A simple shifting of weight from the foot resting on the tower to the foot resting on the wire.  Silent and internally deliberate. 

Compare/contrast this with the article in this April’s Outside Magazine about why people participate in risky sports, and profiles BASE-jumper Ted Davenport.  Neuroscientist Russell Poldrack asserts that there are three ingredients to risk taking: desire for adventure, relative disregard for harm, and acting on your desires without fully thinking them through.  That last factor strays way, way too far into the landscape of recklessness and separates Philippe from Ted.  There was nothing reckless about Philippe Petit.  Deliberate, honest, ambitious, meticulous.

So see this movie for the reasons I outline above.  Also, let yourself ask the other questions.  Like “how can someone afford to spend six years planning this”?  How “real world” is that?  We’re not getting the full story here, but it sure is enjoyable. 

Before your Netflix delivery arrives watch Philippe break Stephen Colbert out of character on the Colbert Report, and you’ll hear Philippe describe that moment when he shifted his weight onto the wire.  Mesmerizing.

Slide decks and spreadsheets

March 26, 2009

This morning I came across an article in mocoNews.net about how Charmin is using a wiki to create a community cataloging the locations of public toilets in ten countries.  As the article points out, it’s not so much the magnitude of the initiative, but the direction it points for how a large CPG organization thinks about its customers and how best to engage them in a conversation about one of its brands.  It’s easy to see when they “get” this transformation and when they don’t.

There’s been a lot written about how brands should be thinking about social media, and our portfolio companies like Wetpaint, Smilebox, and Icebreaker are all deeply engaged in developing products or services enabling a richer interaction between consumers and brands.  I spend a lot of time digging deeply into the trends and subtleties driving and enabling this broader opportunity space, and understanding how important the “understanding of the audience” is to this space.

So a while ago I was asked to guest lecture at a “Top 25” university MBA program on the subject of venture capital and entrepreneurship.  It was at a time when I was travelling a lot, and was really, really busy (which is a cop-out, when are any of us not busy?).  I prepared my talk from a very “inside-out” perspective:  my observations, my points of view, my experiences.  What I didn’t do was spend time examining the course syllabus – admittedly, a brain-dead and inexcusable lapse in not just effectiveness and basic marketing but also common courtesy.

About half way through my talk I made an observation that my job was basically one of digesting information, and that it came in two formats:  slide decks (PowerPoint presentations) and spreadsheets.  I mentioned that between these two documents, you really get the essential information you need from the company, before you dig into the really useful information to help make a funding decision – your own research, your own contacts, your own scar tissue.  

A hand was raised.  The question?  What about business plans? 

I told these students that not only do I rarely come across these, when I do, it’s usually a sign that the entrepreneurs are first-time entrepreneurs, are “old school” in a not good way.  That extracting the salient information from within all that prose takes more time, and in my world, time is a  hard commodity to come by.  I thought this was a useful and helpful piece of “real world” insight.

Except that the class I was speaking to was a few weeks into learning how to write business plans. 

How was it that I was standing in front of 75 MBA students delivering a message that wasn’t “wrong” but clearly was not effective given the context.  Well, with the same arrogance and ignorance large brands who just “don’t get” social media have.

I had completely failed to understand my market and audience.  I hadn’t thought through my objectives for the talk from a perspective any other than my own. I wasn’t thinking “conversation” I was thinking “talking.”

I’m headed back to the same class to lecture again in two weeks.  I know how I will approach the development of my message: a clear set of objectives and a set of messages informed from my point of view and the context of the students and the syllabus.

But back to slide decks and spreadsheets.  As true as it may be that this business is all about digesting information, getting to the point quickly, and that business plans are no longer the mechanism to do this, communication is about by listening, not talking – whether you’re a brand engaging consumers or just someone talking to a group of students. 

I wish Charmin well; that’s not an obvious tactic they’ve chosen, and I hope it’s one based on listening, a lot.  I think it’s brilliant, and reveals an understanding of the audience, the medium, and thier brand.  I plan to be listening, a lot, when I’m in front of those students in two weeks.

Failing in Style – Guest post by Jenny Hall, former CEO of Trendi.com

March 16, 2009

Jenny Hall has graciously agreed to a guest post.   Jenny was the CEO of Trendi.com, a social networking destination focused on young women’s fashion that was shut down in October of 2008, and discusses what she learned as a first-time CEO through the startup and eventual failure of Trendi.

This blog focuses on this juncture of success, failure, and finding the meaning from each.  I think you’ll enjoy what Jenny tells us through her first-hand experiences at Trendi.  Thank you, Jenny, for being OpenAmbition’s first guest writer.

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I really don’t like failure, but I know it’s one of the best sources of learning. I learned a lot the past few years working at a startup, and I learned even more as a result of it failing.

I joined Trendi.com in March of 2007 as the head of marketing and I ended at Trendi in October of 2008 as the last employee and CEO. We had investors, a smart team, a fabulous domain name, a popular blog and so much more going for us- so many reasons to succeed– yet we failed. 

When people ask me “what happened?” I usually say we ran out of money. That’s the cop-out answer- running out of money is a symptom of the underlying issues. I think our underlying issues were communication related (unclear communication with each other, of expectations, and with our customers) and experience related (being young, excited, wanting to do it all and getting nothing done.)

I learned lessons from the mistakes we made as a company and my personal mistakes. Of the many lessons learned, these are the ones that stand out the most to me.

Your target audience should be so excited about your product that they’re pushing you to launch, even if it’s crappy when it launches.

I joined Trendi after the founder received funding for his idea. (I know- that never happens! We were lucky.) I talked to my target market occasionally, but didn’t seek their regular input for 2 reasons- 1) I trusted the investors and founder were right in their beliefs that the idea was a winner and 2) I was afraid of the reaction if I discovered we were wrong and proposed changing the concept.

I should have let my market share what they value, even if it differed from what we wanted to create. Sometimes we get caught up in what we’re building, fall in love with it, and fail to realize other people don’t see it the same way. It’s like parents with ugly babies (hey, there ARE ugly babies) that filter out all negative comments because they’re so in love with what they created. Trendi was, in some ways, my ugly baby.

Launching a product your market is begging to use, even with a few rough edges, will have more success than a fully developed site that doesn’t add any value. Plus, you’ll tie your market emotionally to the product. They feel invested and valued and voila- you have your first product evangelists. Furthermore, their input is the ammunition needed when confronting a team, investors, or a board about why a major change needs to take place.

Keep the focus simple and narrow.

Once you know what your audience values, keep your focus only on the features you need. Trendi started out (on paper) as a simple 8-page design. We quickly escalated the site to include a robust back end, picture management system, full social network, etc.

Extra features added time to our launch, increased the burn rate and made the user experience…fragmented. We assumed the users would like what we built only to find out they didn’t like or use all the features and it was difficult for them to figure out the ‘point’ of the site when they arrived.

We over-built Trendi for one main reason: We didn’t have a plan.

Sure, we had some general milestones, but we didn’t have an actionable, communicated business plan. When there is no plan, startup employees turn into hormonal 13 year olds with severe ADD. Anything catches their attention and can change the intended course of action. What are the competitors doing? Why don’t we have this cool feature? Let’s make it pink! No grey! We need a YouTube video STAT! (Get the idea?)

People often ask where our board was during this process and I’m embarrassed to say we didn’t have a formal board. We had our investors who would give us time when they could and we had some friends we would call on informally…but no board to help us keep focus.

Don’t do it just because all the cool kids are doing it.

There were an onslaught of “social shopping” sites in 2006 and early 2007. We jumped onto that trend and while it’s important to know the trends and competitors, it’s more important to figure out what your substantive differentiation is, how that difference adds value and how to make money because of it.

This is a mistake businesses and people make all the time- doing something because everyone else is doing it. Why do we feel more comfortable when we’re doing what everyone else is doing?

I now know questioning the trends and value proposition needs to be done regularly- at least monthly- to ensure the choices made are in the best interest of the company.

Hire only when it’s absolutely needed.

Everyone should be fully utilized before anyone else is hired and increasing the number of employees doesn’t always speed up the launch. For a company like Trendi, we probably only needed a CEO, two developers, and a designer. Ideally the CEO would have been someone who deeply understood the target market, could raise money, inspire the team, and was a stellar marketer, writer or able to contribute another key skill.

Instead, we were almost a year into the project and 15 employees deep before our Angel (who owned the majority of Trendi at that point) stepped in and made a drastic change that involved laying off most of the employees.

Yowza. Hard lesson learned. The team stayed lean and more productive after that.

If it won’t matter in 3 months, don’t spend too much time on it.

We could spend a whole day talking about how our rating system would look or a week bantering back and forth about a press release. I should have asked myself – will this matter in 3 months? If it won’t matter then, why spend too much time on it now? Time is a precious commodity in a startup and should be spent on what matters the most- quickly building a product your customers love.

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Funny how our resumes show our successes and we take full credit, yet we leave off the failures and if they come up, we blame others. I wish I could blame Trendi’s failure on other people and circumstances, but I can’t. No startup has it perfect- we all deal with difficult employees, investors and economic strains. I have to accept that as a company we made mistakes, but I also have to look back and accept my personal contribution to those mistakes.

Accepting the personal mistakes hurt my ego. I screwed up and it made me question my ability to lead others, my knowledge as a marketer and my future ability to start another business. But somewhere in facing my failure and accepting these mistakes, I was able to learn how I can be a better leader, new things I can try as a marketer, and that I do have the strength to try again.

I always hope for success and aim high, but I now face failure with a humility and thankfulness I didn’t have before. Ignoring failure only hurts you later- you can stuff it away and try to pretend it didn’t happen, but it’ll bite you in the butt at some point. I know that if I face failure as a teacher (a harsh one, but still a teacher) I’ll become stronger and smarter.

I like tea, Thai food and good happy hours. If you want to join me in Seattle for any of these, email me at jennymhall@gmail.com.