Archive for the ‘Self-knowledge’ Category

« Older Entries
Newer Entries »

A BDP from an unlikely “industry”

July 29, 2009

My first job out of business school was with a management consulting firm who focused on growth strategies for their clients.  The four founders of the firm were former partners at Bain, and they brought to our firm the concept of “best demonstrated practices” which we referred to by the acronym “BDP.”

Bain defines a BDP as something that “generates the most value at the least cost.”  At our firm it referred to an example something done so well you could you use it as a model to learn from, where you could discern the essence of success from and apply it more broadly.  This could be a business process or a business model, communications or management style.  It’s a nice construct to help you identify patterns that could be relevant to you or your business.

Of course BDPs also have limitations.  Without the corresponding insight about the context of why an example works so well, about all you’ll be able to do is copy the motions of the example, but not the essence of its effectiveness.   To make a BDP really work you’ve got to simultaneously abstract away the context while also deeply understanding it.

I’ve seen some of the startups I’ve worked with over the years really get this wrong, whose teams will energetically seek out the best performing companies in some discipline (say, acquiring new users) and just copy what was done, without understanding whether or not those same methods really make sense or apply to their business, with their users. 

But every so often you come across an example of simplicity and insight, efficiency of communication, where the problem has been thought through so completely you just wish you could take it, copy it, and paste it into whatever business you’re running.

I came across one of these earlier in the week.  You know from my last post that I’m hiking the John Muir Trail next week, which will take about three weeks.  I won’t be able to carry all my food for that length of time and will need to resupply twice along the way.  This works pretty simply, you mail a package of supplies to one of two “resupply” points, and they hold it for you until you arrive.  You restock your backpack, give them your trash, and off you go again.

But it’s more complicated than that.  I am depending on that food being there when I get there, If it’s not there when I get there, I’m screwed – I’ll be close to being out of food and will still have more than a week of hiking to go to the next resupply.  So getting this right matters a lot.

The first resupply point is like a hotel in the mountains, about a six mile roundtrip detour from the trail.  The second resupply point, The Muir Trail Ranch, is much more convenient, literally on the trail.  The quality of thinking that went into the instructions about how to get your package to them, and how to ensure a successful resupply, is simply magnificent.  The fact that you ship your food to them in a five gallon plastic bucket makes this all the more whimsical.

It’s not just the explanation of the steps and logistics, it’s the tone of the communication.  Clear, simple, welcoming, conveying a desire to make you successful, to make the whole process successful, conveying a deep understanding of the context of their service. 

Their instructions reads like an FAQ, but it’s not a laundry list of questions, it’s a very thoughtful and insightful delineation of your needs and their ability to meet them.  They’ve addressed the “lifecycle” of a resupply – the range of needs you will have (email access, recharging devices, disposing of your trash) when you’ve come to get more food. 

To me the high point is at the bottom of the page, where they encourage you to pre-register your delivery, and will even e-mail you pre-printed shipping labels.  The example label sheet is stunning in its efficiency – I don’t know about you, but I’ve certainly never mailed a bucket before, and doing so is not obvious.

This experience certainly reduced some anxiety about my resupply, but made me appreciate how wonderful it is to be on the receiving end of high quality thinking and customer awareness.  Where insight about the context is abundant.

Tags:, ,
Posted in Business planning, Empathy, Intellectual curiosity, Self-knowledge | Leave a Comment »

Preparation for a long offsite

July 23, 2009

I’ll be hiking the John Muir Trail in the Sierra Nevada mountains in California next month, which is something I’ve wanted to do my entire adult life.  The Sierras and backpacking really took root with me in high school, where a core group my friends went every summer, and continued through college and a few years beyond before losing the thread to careers and starting families.

Three years ago we restarted these annual trips, and about then I realized how much I enjoy being up in the mountains, away from all forms of electronic communication, as a way to get some perspective and some balance.

So this year I leave on August 4, and my friends and I will start down the John Muir Trail, five days later they’ll leave the trail at Red’s Meadow, and I’ll resupply there and continue on, on my own.  I’ll finish near Mt. Whitney, two weeks and 170 miles later.

And I’ve been doing a lot of reading to prepare for the trip.  Mostly trail guides, even a book on the geology of the Sierras (ensuring I will be the most boring person at the next cocktail party I go to).  But one that’s proven particularly helpful is a book called High Sierra by Phil Arnot, and it’s been great at providing detail on side trips I can make along the way.

300+ pages of detailed route descriptions, elevation changes, permit locations…in short a bunch of data and information about as “touchy feely” as the phone book.  It even has a section on “Hiking Solo” with a set of very pragmatic preparation guidelines regarding safety.   But then it went in a direction I didn’t expect, with the following passage:

“So, in a way the wilderness experience may be catalytic in bringing us to face, really face, the most important questions we can ever ask ourselves:  Am I really living the life I want to live?  Am I fulfilled in my work?  Are my relationships based on sharing and intimacy or are they primarily obligatory?  What do I really want to do with my life?”

Well, for those of us who love backpacking and being in the mountains, that set of questions told me the author truly knows his subject.  For me, these are the questions my mind gets drawn to when my “job” for the day is to traverse six or eight miles (or more) of trail at 10,000 feet, and what separates you from the beginning and end of the hike is a lot of time to walk and think.

Take the “fulfilled in my work” question.  That one’s easy.  I love my job as a venture capitalist.  I love that it requires that you think hard about strategy and equally hard about operations and execution.  You’re on a constant learning curve looking at new businesses and needing to quickly get to their essence to make a funding decision.  And when you find a business you want to fund, you get to go deep with it, for years, to help it (hopefully) succeed and grow.

But that’s the “work” part of this, and what makes my job truly fulfilling is who I work with.  Through equal parts self-selection and deliberate effort, my partners and I have created the kind of transparent, friction-free, trust-based working relationship that up until this point I had only read about.

The fact that we had all worked together before getting into this business helped, but over the past five years we’ve had to make our way through uncomfortable, difficult conversations that required egos to be set aside, and personalities to be parsed from the logic and data.  Everybody talks about this, it’s the first time I’ve experienced it first-hand.

That’s great, but actually making money in this business is getting incredibly hard.  The whole industry is in a state of transition and transformation.  Fred Wilson has done a good job explaining this, but in short, it’s taking longer to get companies sold, the IPO market is dead, and the median valuations at sale have been declining for years.  In order to generate the returns institutional investors need, you’ve got to as a firm perform well above median.

It’s daunting.  We’re doing well as VCs, but looking at the whole industry it gives you pause.  This business will be getting smaller before it gets larger, and as I’ve written in an earlier post, the old stuff gets broken faster than the new stuff is put in its place in industries who are in a state of transition.  And this is an industry in transition.

But that’s where the exciting part of this job is.  Transitions create no shortage of opportunity, and challenge.  I’m grateful I have the chance to put some more thought into this, during my long offsite.

Between now and when I “go off the grid” on the 4th, I’ll be posting on some related topics.

Tags:, ,
Posted in fear of not succeeding, meaningful failure, Self-knowledge, Strategy, Success, Values, Venture capital | 4 Comments »

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.

Tags:, ,
Posted in Failure, Intellectual curiosity, meaningful failure, Self-knowledge, Values | 2 Comments »

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.

Tags:, ,
Posted in Empathy, Failure, fear of not succeeding, meaningful failure, Self-knowledge, Success, Values | 9 Comments »

A-players hire A-players, B-players hire C-players

April 28, 2009

This is one of those sayings in the startup world that is so accepted that it’s crossed the border of familiarity and become a full-time resident of the land of trite.  

Guess who coined it?  Steve Jobs.  That’s right, Steve Jobs, when he was getting the Macintosh off the ground.  It’s a phrase we used at RealNetworks a lot, and one that my partners and I use as a result. 

But that it’s trite doesn’t mean it isn’t relevant or true.  It is.  Absolutely. 

And it’s a subtle but important concept to really understand.  What do A-players do for you?  Everything.  Most important, it’s the tone they set in the organization and their influence on the behavior and performance of others. The hiring is critical too, but that’s a byproduct of everything else.

  • A-players are at the top of their game.  This means they know the difference between good and great.  In the work they do, and in the standards they set for those around them and those in their organizations.
  • A-players aren’t threatened by someone better than they are.   Rather, they’re relieved.  That stuff they were struggling with?  They’re happy to get that into the hands of someone who can run with it, faster and more nimbly.  How liberating.
  • A-players know what they don’t know.  A corollary to the point above is that A-players know when they don’t know something, and ask questions.  They have the security to not need to know the answer to every question, and know how valuable intellectual curiosity is.
  • A-players can’t tolerate C-players.  So they make sure the C-players are replaced.  And guess what? The rest of the organization is relieved and inspired.  They know who the C-players are, and have felt the drag on performance.  It may sound harsh, but it’s true.

To me the most essential capability A-players bring to an organization is the tone they set for it.  Their definition of “good” is so much greater than a B or a C player’s, it’s as if they’re speaking a different language.  In fact they are, and it’s critical the organization you’re in all speak the same language. 

This is why starting up companies is so liberating for A-players.  I remember when I was at LSI Logic in the early days, fresh out of college with my head spinning in this startup.  The CEO, Wilf Corrigan, made a comment to me once about why he loved being CEO of LSI Logic so much more than being CEO of Fairchild Semiconductor (which he had been before founding LSI).  He said “because I created a company with only people I wanted to have there, not ones I inherited.”  At the time the answer sounded sensible, but now I realize what he meant was he could hire A-players from the start. 

But don’t get me wrong.  A-players are not a homogenous bunch.  There’s a huge, huge spectrum of abilities and characteristics among them.  Some can be incredibly thoughtful and compassionate, others can be intellectual bullies and seemingly heartless.  But the connective tissue that binds them all together?  They know where to set the bar/standard and how to hold themselves and everyone around them to it.

Tags:, , ,
Posted in chicken killer, Empathy, fear of not succeeding, Intellectual curiosity, Self-knowledge, Values | 4 Comments »

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.

Tags:, , ,
Posted in Business planning, chicken killer, Failure, fear of not succeeding, Intellectual curiosity, meaningful failure, Self-knowledge, Success, Values | 1 Comment »

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.

Tags:, ,
Posted in Business planning, Empathy, Failure, Intellectual curiosity, Self-knowledge, Venture capital | 2 Comments »

Effective networking – as easy as public speaking

March 19, 2009

Over the past few weeks I’ve had a series of conversations with people about what makes an effective networker, and following up my post about the Seattle 2.0 Awards event, “networking” seems like a timely/relevant topic.

To me networking is the ability to develop a real and sincere personal relationship with someone around a topic that the two of us find interesting, relevant, and important.  It’s bidirectional, about giving and getting.

No surprise it has nothing to do with LinkedIn or Facebook.  Just look at the About LinkedIn page: “We believe that in a global connected economy, your success as a professional and your competitiveness as a company depends upon faster access to insight and resources you can trust.”  This is under the heading Relationships Matter.

Wait a second, this is about stuff for you, it’s not about relationships. 

Networking is about taking “what goes around comes around” to heart, and focusing on what you give to someone, beginning with an understanding of that other person.  It’s creating some durable residual value through a conversation, and the goal is to produce a lasting memory of you and your talent/intellect.  Along the way they’ll learn about you, but that’s secondary; it’s the byproduct.

OK, but this can be scary to do.  You are going to reach out to someone you don’t know or know well and ask for something.  In some aspects, this puts you in a situation similar to public speaking (and we all know how comfortable that can be for people).  You need to “perform” and expose some vulnerabilities.  It gets a lot less scary for me when I don’t view this as networking, and instead view this as a way to form and nurture a personal relationship.

Perhaps in this first conversation you do have a favor to ask, or maybe you just want to establish the relationship, or have this person keep an eye out for a role or opportunity relevant to you.  It’s this slice of memory that will provoke them to make the introduction you just asked for, remember your name and repeat it to a relevant contact, or to take your call and grant you a favor someday later when you ask it.

I do this all the time for people, and I don’t mind it one bit.  As a matter of fact, I love it.  I just did it while writing this post.  Someone I know has taken on an ambitious consulting project, and a former colleague of mine who has since become a rock-star marketing exec could help her out.  I loved connecting them, a good fit of two thoughtful, talented people –  who I have real and sincere personal relationships with.

This is taking your values as a person and applying them in a professional context (something I touched on in an earlier post) and doing this in an interpersonally “deliberate” manner. 

And then I thought, well there is networking I hate and am not comfortable with.  It’s the “forced” networking of work-related events – when you’re in a crowd and making the small talk that on occasion produces an interesting and memorable discussion.  This is perverse because in my role as a VC a big part of my job is to get out into the market, to attend events, and to “network.”  I am horrible at small talk, and I admire people who can establish ease and comfort quickly with someone new, and find some common ground.  I am still learning here.

But I approach this in the same way I had to learn to speak in public.  It doesn’t mean I’m always comfortable, it just means I’ve trained myself to do it.  And there are a lot of conversations along the way that just seem to fill space and time, but there are also those moments when I meet someone where we can establish an actual, meaningful conversation.  And then I’m right back in my comfort zone.

Tags:, ,
Posted in chicken killer, Empathy, fear of not succeeding, Intellectual curiosity, Self-knowledge, Values | 2 Comments »

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.

——————-

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.

——-

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.

Tags:, , , ,
Posted in Business planning, chicken killer, Failure, fear of not succeeding, fundraising, meaningful failure, Self-knowledge, Success | 4 Comments »

Guest post coming Monday

March 13, 2009

I wanted to let you know that OpenAmbition will be showcasing its first guest post, from Jenny Hall, former CEO of Trendi.com, which was a social networking destination focused on young women’s fashion that was shut down in October of 2008.  Jenny will be sharing what she learned as a first-time CEO through the success and eventual failure of Trendi.

I met Jenny the first time a little over a year ago, when she was trying to raise a Series A financing for Trendi, and for  reasons I explained to her, my partners and I were not able to fund her company.  Jenny touches on a few of the reasons in her post on Monday, but in many respects, what she describes are what many entrepreneurs wrestle with in an emerging but crowded market, where so much is learned in real-time. 

Like with many of the entrepreneurs I am fortunate enough to encounter, she and I have kept in touch, and when she stopped by my office a few weeks ago to tell me about her next startup idea, the subject of Trendi of course came up.  Jenny talked me through some of what she had learned, and how valuable the failure of Trendi had been for her personally (but not painless for her, for her employees, or for her investors). 

When we moved on to discussing her next startup idea, it was inspiring to see how much was informed by what she had learned through Trendi’s failure, how she had embraced what many would have tried to forget or move on from.  And so it seemed like she had a story to tell that the followers of this blog could relate to, find interesting, and hopefully find some meaning in too.

I hope you all enjoy it, look for her on Monday.

Tags:, ,
Posted in Business planning, chicken killer, Failure, fear of not succeeding, fundraising, meaningful failure, Self-knowledge, Success, Values, Venture capital | Leave a Comment »

« Older Entries
Newer Entries »