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The high cost of winning

November 17, 2016

It’s been a little over a week since Donald Trump won the US presidential election, and this is playing out as expected. Republicans are the “winners” and Democrats are the “losers.” The obsession with winning at all costs – and the Republicans paid quite a price for this win – is what has polarized our nation, and gridlocked our government.

But with Trump it was different. Let’s not look at his policies – politics is about differing policies, and democracy is supporting the President whether you agree with his/her policies.

This election was different. The words Trump used during his campaign were breathtaking, Shocking. His words revealed him to be a racist. They revealed him to be sexist. They revealed him to mock the disabled. They revealed him to dishonor our servicemen.

And throughout the campaign, the keen observers were reminding us “Trump is not the issue, it’s that so many people support him – that’s the real issue.”

trump-and-his-supporters

True story. As shocking as it is to confront a country led by a racist, sexist bully, it’s even more horrifying to contemplate that people chose that kind of a leader.

So don’t fear Trump. Fear his supporters.

And “his supporters” are people in your community.

The people you shop with, you go to school events with, that you socialize with. For them racism and sexism were not deal breakers. That’s the alarming part of this election.

And there is real fear. In the days after the election our high school age son came home from school sharing with us that his friends and their families are worried about their safety and security. These are naturalized American citizen families of Vietnamese origin, Sri Lankan origin, Mexican origin, middle eastern origin. They are living in fear today.

What they fear is what might happen to them in their community because of the color of their skin, their gender, or their religious beliefs. They certainly don’t fear that Trump will personally discriminate against them, or threaten their safety or well being. It’s that the people they live in this community might. The people who at some point decided that racism and sexism were not deal breakers.

I live in a community with a national reputation for supporting disabled students. The university campus here has sent numerous disabled athletes to the Special Olympics. How should they feel in their community when they see the leader their community members vote for is someone who openly mocks the disabled?

I don’t believe that the people in our communities that supported Trump believe they’re racists or sexists. But the moment of choosing Trump is the moment of truth.

I honestly struggle to imagine an explanation from parent to a daughter explaining why they voted for Trump yet somehow are not in some way endorsing sexism. Would it go like this?: “I’ve decided to vote for Trump, but even though he has repeatedly demeaned women and admitted to groping them, you should feel safe in a society with him as a leader.” Really? How safe can you feel as a woman today, with the Commander-in-Chief setting a tone of blatant sexism?

When you talk to really effective leaders they will tell you the most significant aspect of leadership is setting the tone of the organization. Setting the tone of what your expectations and standards are. Setting the tone for how work will get done, how decisions will get made, how people will treat each other.

A tone is being set that racism and sexism are ok. That it’s ok to make fun of the disabled. That it’s ok to pass judgment on the men and women in the military because of their race, creed, or national origin.

Put another way, if someone on one of my teams said what Trump has said about women, I would have fired him. And I wouldn’t have deliberated whether or not his ideas and plans about his role in the business had merit. Because none of that would have mattered. I don’t tolerate discrimination on my teams. Zero.

If someone said what he said in a job interview, I wouldn’t has thought “maybe he has better ideas than another candidate?” or “I dislike the other candidates more than this one” – that’s the last I would have seen of them.

Generally speaking, I can’t imagine an ethical corporation that would hire someone who demonstrated the behavior Trump did during the election cycle – regardless of how well they might do the job.

You can like Trump for his policies, but unless you’ve rejected his racist, sexist, mocking of the disabled, dishonoring of our military men and women – then you are enabling racism, you are enabling sexism, you are enabling the diminishing of the disabled and military. Because you can’t say “I support the disabled” and support someone who does this:

trump-disabled

So where does that leave us? I’m not sure. What do we do when we live in communities made up of people who through their vote for Trump seemed to say “Racism, sexism, and other forms of discrimination were not deal breakers.”

It seems to me the obligation for reconciliation lies with them. The responsibility for explaining to the people they see in their community how they could support a candidate like Trump and yet be intolerant of racism, sexism, and other forms of discrimination. They bear the responsibility of safeguarding the members of their community who are of different races, creeds, and colors. And the rest of the community will need to hold them accountable for their actions.

Greg Popovich couldn’t have framed this any better. It’s not about politics. It’s about behavior and our communities.

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I’m done with Uber – The moral cost is too high

November 29, 2014

I was one one of Uber’s best fans – I must have recruited a dozen friends and colleagues to the service, because it fundamentally is just so much better than taxis or car services. Wonderfully inspired idea, and at the street level, brilliantly executed. I loved it.

And I use the past tense because I did love it. But not anymore. The trickle of moral lapses by Uber’s CEO, Travis Kalanick, have become a roaring torrent. Uber has an ethics problem, but most importantly it has an ethical leadership problem.

Peter Thiel summed it up succinctly: “Uber is the most ethically challenged company in Silicon Valley.”

Which is why the details of the plan to smear journalists who create unflattering views of the service pushed me to the point of being all done with the service.  So, on November 25 I sent my request to Uber to cancel my account, as “the moral cost to me of doing business with your firm is more than I can afford, and I have happily created my first accounts at Lyft and Curb.”

And in efficient Uber fashion, I received this confirmation of my account cancellation, which is sad. The service and drivers are great. But that’s not enough today. You have to believe in and trust the people at the top. And I can do neither with Uber the way it is being run right now. Travis – until you show some leadership and I won’t be back.Uber Cancellation

Personal Heroes

October 21, 2013

I have personal heroes – folks who have lived their lives in ways that give me inspiration and a vocabulary to name my own ambitions. People who are unafraid to say what they believe, regardless of what it will cost them.

David Walsh is one of my personal heroes

Few people outside of professional cycling know who this man is, but he’s the journalist who first suspected Lance Armstrong of cheating, and spent 13 years doing the difficult work of uncovering the evidence and speaking the truth. And he became the target of all Armstrong could throw at him.

This Sunday Times article says it all:

When Lance Armstrong won his first Tour de France in 1999, David Walsh wrote in The Sunday Times that he watched the race in sadness. Armstrong’s astonishing exploits, just three years after his successful battle with cancer, did not make sense to him. Rather than joining the unquestioning journalists who lauded the American’s achievements, Walsh called for an inquiry into the Tour de France in July 1999,….”

CTWThink about the context. In 1999 – the first year of Armstrong’s comeback – Walsh calls this out. And for the next 13 years  pretty much everyone else tells him he’s wrong. It costs him his job, professional and personal relationships. How lonely it must have been for him.

I’m not going to re-hash the whole Armstrong crime, but if you want to dig in, look here, and here, and here for a start. David’s books are “Seven Deadly Sins” and “From Lance to Landis”.

I am a huge cycling fan, and my family and I spent five  vacations in the French Alps to watch the race in person. In 2006 through a journalist friend, we struck up a dialogue with David to encourage him to write what became “From Lance to Landis” – his first english language book that laid out the evidence Armstrong was cheating.

David flew to France and spent the weekend with us. I was awestruck at the simplicity of his motivation: to expose a lie. It wasn’t personal, it was about values. This was a man of principle outraged at the crime he clearly saw but was incredibly inconvenient and unpopular to expose.

Over dinner long into the night, and then again at breakfast the next morning, the talk centered on the crime that was happening in plain sight. Incredibly we were sitting with him at that dinner when his phone rang – another journalist  calling him with the news that Floyd Landis had tested positive at the just completed Tour de France. Talk about being at ground-zero at a pivotal moment.

Looking back I can’t believe that weekend actually happened. What brought us together? I would like to think a sense of shared values.

This is a man whose humility, values, and sense of purpose we can all learn from. A true hero. I’ve got a few other people who serve this kind of inspiration, I’ll write about them later. For now, thank you, David.

My User Manual

October 12, 2013

A little over a year ago I started a new job, and a big component of my role was to help the company bring a lot of scale to their marketing, and bring a higher tempo and user focus to the company’s product development. This meant taking three groups of already high performing teams, and leading them into territories unfamiliar to them, while also helping them develop skills and capabilities new to many.

This is the kind of job that comes around in your career rarely. Tremendous, tremendous fun, and the best part is it’s only just beginning. We’re growing like crazy, and are about to enter that phase of the market where we have the right offering at the right time, and are about to see some pretty breathtaking expansion.

transparency

And I found myself explaining how I work, how I manage, and many of my core values as a manager, but also as a person. A lot.

So much of creating the opportunity for the rapid experimentation, fast failure, “iterate to excellence” team performance is based on how you work as a team, not what you work on as a team.

I mentioned this to my wife in a text message while on a train headed to work, and she pointed me to an interview with a CEO about his “user manual” – a one page document that lays out how anyone in the company can easily understand how to work with him. I LOVED it. A combination of approaches, philosophy, and personal values.

By the time I got off the train I had a complete draft of my User Manual. Check it out, I’m on v2.1

By the time I’d plugged in at the office I published it to  everyone on my teams via Chatter, as well as my counterparts on the exec team and a bunch of others I work with frequently.

Folks on my team appreciated the transparency, and it’s made it so much easier to engage with other teams and get to a place of trust and performance that much more quickly.

But the best part was for me. Any time you have to be intentional about something, and write it down, you learn something about yourself.

The Unfamiliar State of Funding a Startup

March 8, 2012

I work with a lot of startup companies, and am currently involved with three that share the same characteristics: pre-product, pre-revenue, and at the very beginning of fundraising. And I’m having the same conversation with all three. It goes like this:

  1. The cost of getting a company to scale and even to profitability has dropped dramatically in the past ten years.
  2. The nature of venture capital has shifted from an early stage focus to late stage or even growth equity investing.
  3. Angels and experienced high net worth folks have stepped in to fill the role VCs served for early stage investing.
  4. A viable fundraising strategy can default to a path that doesn’t assume VCs participate at all, or perhaps only towards the end.

Let me expand on each of these points.

COST OF GETTING TO SCALE – THE RISE OF THE MACHINES

There are a lot of factors at work here, to the benefit of entrepreneurs. The rise in cloud computing means that fixed infrastructure expense has largely been eliminated from the business plan, and this will only get better (Amazon just announced it’s 19th price decrease in six years). Virtual teams + Google Docs drive OPEX down even further unburdening you from lease costs.

The shift to “inbound marketing” – social media, blogs, SEO, viral – can drive large volumes of traffic at significantly lower costs (60% less or more) than traditional “outbound methods – and at higher conversion and retention rates. It takes a lot less of your marketing budget to reach and acquire users. With the shift to freemium and subscription business models you can also let your most active users decide for themselves to pay for your services through in-app messaging and offers – significantly reducing the cost of sales.

I call this the “Rise of the Machines” because metrics and machine-driven resources/methods do much of the heavy lifting at a fraction of the cost of human-intensive alternatives. Josh Kopleman surveyed his portfolio and found “…that companies today are 3 times more likely to get to $250K in revenue during an eighteen month period than they were six years ago. ”

VENTURE CAPITAL IS DEAD – LONG LIVE VENTURE CAPITAL

The money that VCs invest comes from “institutional investors” – pension funds, endowments, insurance companies – and these institutions allocate their investments across a wide range of “asset classes” to manage and diversify risk. They tend to make these allocations based on ten year return performance averages, and beginning in 2009 (as my partners and I found out with unfortunate timing) the ten year return for the VC asset class went negative.

That’s for tough the VC industry overall, but if you look at the top 20-25 firms, the ten year return is quite good. So what institutions did was stop putting money in general into the VC asset class, and only put money into the big, established firms. This caused fund sizes to swell (Accel’s most recent fund was $1.35B+ comprised of $475M “early stage” + $875M “growth equity” funds), which incents those firms to put larger and larger investments to work in each deal (to justify their partners’ time).

So at a macro level, investment into VC funds dried up for all but the top firms (reducing the total number of VC funds) and poured into the top firms, shifting their focus to larger investments in later stage firms.

ANGELS BECOME ANGELS ALMOST LITERALLY

At the same time early stage VCs moved out of the market, a wave of experienced tech executives who had made fortunes building internet companies became very active investors. They brought more than deep pockets, they brought valuable insight and experience and even better – intensive, engaged roles with the companies they funded.

And along the way, incubators emerged as mini-factories where angels could become involved with lots of companies and let the law of large numbers help them there. Overall, angels are investing 40% more than they were even a year ago – now over $700K per round, and there are concerns there’s a bubble happening with incubators. But the headlines are, angels have stepped into early stage investing at a scale and role traditionally reserved for VCs.

STARTUP FUNDRAISING HAS NEVER BEEN BETTER, AND WORSE

What this means for startups is you can get your business to scale with ten times less money that you needed 10-15 years ago. $3M – $5M. If you plan well and are well connected you can do this with individual investors who add a ton of value and will roll up their sleeves to help out. The real benefit is you can also find individuals who share the same expectations you have for the outcome of the business. A 5X return on $3M may be the right outcome for the business and for investors who define success as a financial return coupled with a durable business that solves a problem they care about.

It also means you can liberate yourself from having to map your business and outcome to the trajectory that many of the larger VC firms need their investments to align with – they need billion dollar exits to generate the billion dollar returns they committed to their institutional investors.

Don’t get me wrong here. VCs are an important and valuable catalyst to the technology sector and the economy – and many are out there doing what they’ve always done to identify the next great disruptive business. And for your business, a VC can be the exact right fit either at the beginning or once you’ve gotten to scale.

It’s just that now VCs are playing a different role than they have in the past, and for startups this means it’s a brand new, unfamiliar, day out there.

SIgning off

July 31, 2010

I hate leaving something undone, unresolved, and I am sorry to tell all of you that I have done exactly that with this blog.

So, this is the last post of OpenAmbition.  I have run out of the space inside me and within my life to keep it alive and vibrant. Which is incredibly sad.  Sad given how much enthusiasm and life so many of you sent my way to start it, and more importantly, to keep it going.

I hope and look forward to returning to this.  It was fun, exciting, inspiring, exploring why we take risks, why the prospect of failing, and the act of failing, can help motivate us and inform our successes.

Thank you, all of you, for the help and encouragement to breath some life into this idea.  This blog brought me together with so many friends, introduced me to new ones, and brought the best out of all of us.

Thanks again,

Pete