Posts Tagged ‘humility’

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.

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Posted in Business planning, Failure, fear of not succeeding, Intellectual curiosity, meaningful failure, Self-knowledge, Success | 2 Comments »

Peripateia and the value of getting it wrong

March 9, 2009

One of my kids favorite TV shows is “Dirty Jobs”, and I have to say that what I’ve seen of it, I have liked, because the host Mike Rowe comes across as genuine and inquisitive.  He’s there to understand, not to judge.  That alone is a wonderful set of values for children to see and explore, regardless of medium.

So, when a friend forwarded a link to Mike Rowe’s TED talk  (embedded below) on the merits of hard work, my intellectual curiosity was high.  His job is to question assumptions and to get all of us to understand the real, human aspects of jobs that other people are unaware of or assume just get done. 

He talks about how he’s “gotten it wrong” a lot, but that getting it wrong informs the essence of what he does and how he does it.  He shares the meaningful failure he encounters as an apprentice on a sheep ranch where it’s his job to castrate the lambs. 

He does his research ahead of time and determines the “humane” way to perform said castrations (with a rubber band).  Then he gets to the ranch, and finds the castration performed there is quite different (with a knife, and more); on the surface a more grisly method than he or we could have imagined.  Let’s just say that this would make killing an actual chicken seem simple and an easy choice.

But in the process of telling the story he introduces the concept of peripateia – the sudden or unexpected reversal of circumstances or situation (remembering it from his days studying Greek classics).  What a wonderful way of describing meaningful failure. 

Mike’s castration dilemma is so clearly framed, his assumptions apparent (“the ‘humane’ way is the right way”) and then, through first-hand experience, not only questions that assumption, he casts it aside when he realizes the definition of “humane” needs to be questioned. 

He describes in twenty minutes what some entrepreneurs I know have taken years to internalize, and he draws on some key themes I’ve explored:

  • Getting it wrong is something you need to embrace, it’s what enables you to both perform better and to comprehend your purpose and goals more insightfully.  It’s meaningful failure from another point of view.
  • You need to know when to stop what you’re doing, and question your core assumptions.  This is hard, as I’ve mentioned in previous posts.  When he stops what he’s doing, he demonstrates incredible integrity and purposefulness.
  • Facing up to the unfamiliar, the unpleasant, is precisely what presents you with the opportunity for discovery and learning, and improving the quality of your results.  This is a benefit of chicken-killing I hadn’t thought about.

But the impact of Mike Rowe’s honesty doesn’t stop there. 

He has a transparent methodology (no takes, no scripts, it’s all real) that underpins the credibility of his “product”.  What I loved about this anecdote is that he even had to question that foundational element of his show; he had to stop the filming because his core assumptions about the subject matter were so precarious.   That takes experience and a confidence in your process and values.  He didn’t rationalize, he didn’t talk about the cost of stopping production, he just did it because he knew he needed to.

Back to peripateia.  That doesn’t exactly roll off the tongue, but what an elegant term to describe how you bring meaning to failure, from getting it wrong. and finding meaning from the doing.  I want Mike Rowe on the board of the next company I fund too.

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Posted in Business planning, chicken killer, Failure, fear of not succeeding, Intellectual curiosity, meaningful failure, Self-knowledge, Values | 3 Comments »

Five ways you can tell if the VC you’re talking to is being straight with you

November 28, 2008

One dose of humility I try and keep at the front of my mind is that before I went into venture capital, I was in startup companies, and I had to raise money myself. This means I also had to develop and hone the pitch deck, and meet with venture capitalists.

It’s a good place to put your mind when you’re hearing a pitch from someone. To remember what it felt like to try so hard, and be so eager to hear the good or the bad, to get some feedback, some guidance, some hope.

But something I think we’ve all learned as VCs is how hard it can be to say “no” to someone, and to do it in a way that respects the entrepreneur’s role in the transaction. We look at 400+ deals a year, and fund fewer than four. Saying “no” happens a lot, and happen for a range of reasons, generally not because the company is bad or the idea is bad, but because to fit through our filter, a whole lot needs to line up really well.

So, if you walk into your meeting with a VC cognizant of the fact it’s 100 times more likely you will be turned down than not, well, you better get something back for your time, don’t you think?

So here are the five ways you can tell of the VC you’re dealing with is NOT being as fair with you as you’re being with them:

  1. They took more than they gave in the first meeting. VCs see tons of deals and have relevant experience. Meeting with you should be an opportunity for them to help you. If they view the meeting as a way to feed them, time to move on.
  2. They’ve met with you more than two times without setting expectations. Remember, your time is valuable, and you can’t waste it with folks who can’t articulate a process and put you on a timeline. The process can be “Let me track you for the next year”, which tells you no funding in the meantime. But if you’re trying to raise money now, then you need to know within two meetings if you’re on a path to that, and where that path leads.
  3. They want you to extract all the risk. It’s totally chicken for a Series A VC to tell you they’ll be ready to invest once you’ve proven the business works at scale. Go to a bank instead (assuming you can find one that is lending).  It’s fair of them to ask you to show you’ve validated the value proposition and core assumptions, but that’s different.
  4. They want someone else to lead. What does this mean? “I will give you money if someone else says they will invest first?” This is kind of helpful, but in the end moves you not a whole lot further down the road.  You need someone to lead the round, and firms that wait for another to lead are making essentially a non-commitment, and are leaving a great deal of work for someone else to do.
  5. They didn’t tell you why they said no. This is really important. VCs pass for specific reasons that they discuss in their Monday meetings. Reasons might be “the team has never done this before” or “I think this is a feature of someone else’s platform”. Don’t you think this is important information to know if you’re the CEO? Yeppers, it sure is. You’ll know when you’re dealing with a quality VC when they tell you why they passed, because they know this is information that will help you.

So, a quality VC understands your time is valuable, that they’re in the business of making risky investments, and most importantly, that “no” is an opportunity to impart advice/feedback to help the entrepreneur raise money from someone else where the fit is better.  Whether you raise money from a particular VC or not, it’s the process of the interaction that’s valuable and important.  Success or failure has meaning here, and the high quality VC firms not only acknowledge this, they focus on it.

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Posted in fundraising, meaningful failure, Venture capital | Leave a Comment »

Why “I don’t know” is a great answer

November 27, 2008

Here’s a news flash: You can learn a lot about someone by asking a question and seeing how they answer it.

 

That’s so obvious, and we’ve all heard it a million times. I spend a lot of time listening to pitches from startup company CEOs, as well as spend a lot of time with the CEOs of my companies, and in both cases, end up asking a lot of questions.

 

The questions, that’s where the really hard part of making productive use of time is. Anyone who has the ambition and the drive to start a company is generally smart, and has spent so much time on their business that they’re awash in information about it. Anyone who is CEO of a startup is the same way, except they’re not pitching a vision to you, they’re living and managing it. In either case, it’s their job/role to have anticipated the key questions, and have the answers to them.

 

So, it’s hard to ask questions that dig below the surface, that reveal something that hasn’t already been thought of. If you’re lucky enough to have thought of one, it can accelerate everyone’s understanding of the business and the people running it. Conversely if you’re the CEO, when those questions are asked, it will put you in a potentially awkward position. Do you have an answer, and should you have had an answer.

 

This is true about life in general, so while what follows is specific to my job, I find it’s the same calculus with friends, spouses, children, parents….

 

I love it when we get to that juncture and the CEO says “I don’t know the answer”. It’s even better if they then say “there are a number of ways to try and answer it, let’s start….”. Now you’re about to take a trip to a very rich landscape indeed. A landscape where you’ll find out something potentially valuable about the company, about the CEO, and about your ability to work together to solve problems.

 

But there’s another direction that frequently gets taken. When the CEO produces an answer. I choose that verb deliberately. The answer is produced right there, like a big patch applied over a void. The void is hidden, not explored. This is where ego and insecurity hijack intellectual curiosity and drive it right past a tremendous source of opportunity.

It’s where the person being questioned feels the need to have an answer for every question, that somehow exposing that they don’t know is bad or weak.

 

Once you become familiar with the “answer for every question” mentality, it becomes a warning sign of significance. I hate it. It spoils all the fun. Worse, it destroys credibility at an alarming pace, but in a very quiet and nuanced way – because you can’t possibly have all the answers in a company that’s still more vision than substance.

 

And it turns out, the people who most often fall into this trap are the folks who have left the large technology companies to start up a company. It reveals the culture they had to navigate through to succeed in the “big company” world. The problems generally were so well understood you could have and were expected to have all the answers. And if you didn’t, you could “patch and pivot”, loop back, and get the answer – accountability was so diffuse, and decision cycles so long.

 

But what gets missed here is that the answer isn’t important, at all. It’s seeing that juncture where you don’t know the answer – that’s the super valuable piece of information. That may tell you about a core set of assumptions that are off, or an area of opportunity that’s been missed or overstated.

 

I love the landscape that is revealed in not knowing the answer. I love working with people comfortable with traversing it. I love it when a CEO sits me down to talk through a tough problem, and will state the truth: “I know I’m missing something here, help me figure it out”. When I hear that, I know the fun is about to begin.

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Posted in Business planning, Intellectual curiosity, Self-knowledge, Values, Venture capital | 3 Comments »