Monday, December 31, 2007

First date

It's less than one-hundred minutes shy of the new year. My boys are pecking away -- Club Penguin tonight, with Green Day blasting via iTunes -- on Mac laptops, winding down 2007. They're both aiming for their first stay-up-til-midnight year; doubt it will happen, though I'd wager they'll make it before me.

The holiday break, a tonic of friends, football and brain-numbing farting around, conjurs thoughts of firsts. Firsts as in new experiences, unknown unknowns (prospective firsts), and wonderous what-ifs. A world sans firsts is, to quote my mother-in-law, beige; firsts are a reason for living.

Beyond the wonderment of my five- and eight-year-olds' daily firsts, I conjure a wonderful lesson from my friend Sydey (Prince's Rasperry Berret, which reminds me melodically of Syd, cranks on my son's PowerBook). As the marketing maestro for a kick-ass law firm, she shared an apt story.

Parked in a weekly meeting with the firm's partners, she analogized business development with dating. Think of the first time you took your wife or significant other on a date, Syd set the table. Blank faced, the lawyers nodded. Just like your first date -- I'm paraphrasing here -- you took it easy. Maybe you held hands, perhaps you shared a first kiss.

Courting a prospective client, Syd shared, is similar. You may make it to first base, but the future (a double, triple, or home run?) is engagingly and tantalizinlgly, left for future days. Right?

Syd surveyed the audience. Blank stares, incredulous (what, are you naive?) looks. Getting to first, second, or third was not in the cards; the teach-me-how-to-market lawyers shot for (and hit the) moon on the first date.

Reminds me of a story Tom Wolfe shared in a talk a few years ago at UC Davis. In his quest to author Hooking Up, he parlayed a similar metaphor. Again, I paraphrase (this time Wolfe): When I grew up, people used a metaphor to describe their progress with a mate. First base was kissing, second base was heavy petting, third base oral sex, and hitting a home run: Going all the way. Today, in college, first base is heavy petting, second base oral sex, third base intercourse, and a home run was learning their partner's name.

Syd's point -- perhaps the great Tom Wolfe's too -- was that meaningful relationships are a slow build. You do not need to hit a home run in your first plate appearance. Getting to first, building trust, is a viable initial stride. Business (or relationship) development is a slow build; patience is truly a virtue.

The haste entrepreneurs share to make it happen oftentimes conflicts with reality. Business is based on meaningful, trustful, fruitful, mutually beneficially relationships. Relationships are not transactions -- transactions (results) residue based on the strength and longevity of the relationship. Hitting a home run in your first at-bat may feel good, but it's not necessarily the most healthy product of your effort.

Happy new year. Best wishes for a bountiful 2008 filled with firsts.

Thursday, December 20, 2007

POTW: TripIt

We're polishing plans for a trip down south after Christmas. Two nights in Avila, then a few nights (wrapped around the UCLA-UCD hoops game) in L.A. It's a pretty basic trip -- no flights or car rentals -- but there's still a lot of there there. Pre-departure we'll probably fill a folder with hotel confirmations, tickets, maps and the like.

Which leads me to this week's POTW from Springwise: Effortless Online Travel Organizer. Snapshot:

Anyone who's ever traveled is surely familiar with the dreaded Manila Folder—that sheaf of printouts, receipts and tickets we rely on to stay on schedule during a trip. Now TripIt promises to free us from those manila shackles with an online service that organizes all the pieces into a single, consolidated itinerary.

Users begin by simply forwarding all their travel confirmation emails to TripIt. The site can accept booking confirmations from most travel agencies, airlines, hotels, rental cars, rail providers and even restaurants. All information is kept strictly secure and confidential, and TripIt's "Itinerator" automatically combines everything into a single master itinerary. TripIt then searches the web for complementary information, including Google maps and directions, weather from the NOAA, SeatGuru airplane seat advice, Wikipedia city information, current events information from Eventful, city photos from Flickr, and dining reservations from OpenTable. Users can print out their itinerary and go, or they can customize it with additional maps and directions, notes and webpages. Itineraries can be accessed while on the road from a mobile device, synched into Google or Outlook calendars using iCal, and also shared with friends, family and colleagues through the site's social TripIt Friends component. TripIt is free to users around the world; advertising and referral revenue opportunities are in the works.

Sounds cool and I can see the combinatorial value, though it's a nice-to-have service. TripIt's virtues remind me of two recent conversations. The first occurred in Gainesville a few months ago with a row of fanatical Vanderbilt undergrads (the poor engineers were wearing ties to a football game; 'tis tradition for Vandy students). I asked the pimple-faced gents: What's more valuable to you, email or Facebook? Duh ... Facebook by a mile ("I only use email for classes and talking with my parents."). How about Facebook or instant messaging? After a few pump fakes, the Vandy boys agreed: We can't live without IMing. (My read: Email is nice to have, Facebook is cool, but IMing is a gotta-have tool.)

Conversation two, via last night's dinner-table discussion. What does Berkeley (our lab) need? Food and water, chimed Scott. Two bowls and his bed, opined Ty. Tennis balls and baths, I offered. No, dad, Berkeley doesn't need those things.

Be it travel planning, college communications, or the life of a lab, pursuing needs (versus wants or likes) is imperative.

Wednesday, December 19, 2007

Whiners

We have too many rules in our house; ‘tis life with young boys who are learning consequences and morals on the fly. My wife and I employ a collection of carrots (you can play Club Penguin for 15 minutes if you …) and sticks (if you ______, you can’t leave your igloo/play Club Penguin). I think the sticks work better.

The two most important Soderquist regulations: Be nice to mommy (and your brother), and no whining. The latter is an artifact on my oldest son’s door.

Companies are somewhat like families, artificially inseminated around an idea, a collective purpose, and a bevy of values. Families are directed by moms, companies are ushered by leaders. Both, when successful, are unselfish – they give more than they get. Givers are effortlessly allocentric. Getters are selfish, prone to whining.

It takes just as much, if not more, energy to whine versus give. Whining is a proactive effort; giving is natural, reactive.

What’s worse is the negative energy that whining perpetuates: It can kill a company faster than a poor product or erroneous strategy. Example: I am acquainted with a company that’s embroiled in a board-level cat fight, super smart guys chaperoning a technology with great potential (that, unfortunately, may become notential soon). Big time finger-pointing and negative energy abound (is it possible to have negative momentum, where mass is multiplied by negative velocity?). A contemporaneous (today) email excerpt from one cat to another:

Your making a scene about this now is as helpful as kids screaming in the backseat of a car in traffic.
Happy holidays to you too. Lumps of coal to the side, a resolution is evident if – it’s a major league if – we can discard emotions and apply logic and common sense. Therein lies the challenge: People run companies. People are emotional. Emotions can cloud judgment, for both givers and takers. When this happens, the efficacy and potential of the company, regardless of individual intentions, can dissolve. Fast.

Rewind to the kids and one of their favorite Jack Johnson tunes:
It’s always more fun to share with everyone.
If you've got a ball, bounce it to the gang
If there is a new kid, invite him out to hang
If you've got one sandwich, cut that thing in half
If you know a secret joke, tell it and share a laugh
If you've got two drumsticks, give one to your friend
Make one beautiful rhythm, share a beat that never ends

Monday, December 17, 2007

BMF

When my dad helped crescendo California Analytical Laboratories in the early 80s, he coined a rallying cry: [We are] The Best Mother Fucking Lab. The fridges were stocked with beer, Mick and the boys melodied through the halls, and hippies-turned-chemists cranked out water, soil and air samples, riding the Super Fund wave on their route to catapulting CAL Labs public. Life was good. The license plate on my dad’s Toyota pickup truck was the exclamation point.

Aside from being obviously profane and devilishly in your face (the DMV’s license plate police failed to translate the acronym), BMF – to me, with 20 years of hindsight – was a genuine call to trump mediocrity. Being good, great, or just another analytical lab did not suffice. CAL Labs was the best.

If memory serves, I wrote a few weeks ago about great being the enemy of good. Good enough is, when you’re starting a company or trying to launch a product, often the answer; you do not have enough oxygen, time, or capital to be great. Get it out there, emerge and adapt. Being the best will come if you have the courage to point your tips downhill (destination unknown) and traverse the mountain.

But it’s scary, especially if you’re used to having the answers: Clear visibility and calculable calculus are preferable to blizzard-blocked vision and uncertainty. I live this daily, the quest for certainty, clarity and known knowns. It’s a Pollyannic place.

Jackson Browne phrased it aptly in Red Neck Friend:

Come on and take my hand
I may not have the answer but I believe I got a plan
The Oh shit, we may fail, we do not have the answer bemoan of Eyeores is a cry for mediocrity. If you aspire to be the BMF at whatever you endeavor, you set forth with a plan. The answers will come, perhaps perpetuated in metal.

Friday, December 14, 2007

POTW: That's what I'm talking about

Had a cup of coffee with a friend last week. He -- among many terrific contributions -- authors a wonderful blog. After agreeing that our blogs were a platform to think (and share our thoughts, his more cogent and insightful than mine), we turned to The Great Marc Andreessen. How does he do it? we puzzled, equally amazed at Andreessen's ability to churn out meaningful, treatise-esque posts.

Andreessen strikes again with this week's post of the week: That's what I'm talking about. Therein he continues his wonderful dissertation about the Hollywood writers' strike and the state of the entertainment industry. He parlays a story from a writer/producer-turned entrepreneur and their quest for VC funding:

We met with a lot of VCs.

And had a lot of long, interesting conversations – no money, but that was okay; we were unknowns, and not engineers. Pretty much everyone we met was thoughtful and smart and enthusiastic about the future of web-based entertainment. Everyone we met spent at least 90 minutes with us, talking, musing, thinking out loud.

No one does that in Hollywood.

No one in Hollywood thinks out loud. Not like Fred Wilson, or Brad Feld, or Mike Hirshland or... I could go on.

We don’t think about the machine. We only think about feeding the machine.

And right now we’re all standing around a machine that’s making alarming noises and emitting a funny smell and we’re all arguing about whose fault it is, rather than trying to figure out how to fix it.

Or whether to throw it away.

Three cheers for fatheads.

Fritz

I was reminded this week, thanks to one forgetful meeting, of three things: the resonance of genuine character, the virtue of being enamored with what you do, and the value of telling a good story. The (antithesis) catalyst was a meeting with a fathead, an anything but genuine, passionless, quant-citing financing type. Life to (with) said lard brains is a game of drab checkers. It was one of those encounters, to paraphrase Buffett, where you step on a pop top and blow out your flip flop (cut your heel and have to cruise on back home). What a waste.

Enough whining; back to my memory. Econ courses in grad school kicked my rear. Supply, demand and the point of elasticity were ungraspable concepts. One week in one econ class, we explored the economics of the beer industry. I was trickling through my twenties … beer was the libation (oftentimes the cuisine) of choice. My interest amplified, I immersed myself in the week’s readings and case studies.

At the onset of our lecture, we noticed an older, grandfatherly gentleman in the back row. Must be the prof’s dad, we whispered. A few dozen minutes into his lecture, Dr. Smiley welcomed our guest: I would like to introduce Fritz Maytag, tonight’s guest speaker. Fritz who?

For those in the know – not me, obviously – Mr. Maytag was the proprietor of Anchor Brewing Company. He commenced a two-hour-or-so visit with a story, detailing how – in the early 1960s, if my too-many-Anchor-Steams-ago memory serves – he purchased and operated the brewery. Seated in a tavern in San Francisco, Fritz overheard two advertising execs lamenting their failure to profitably operate Anchor Brewing Company. Tears in their beers, they were getting high on their own failing supply.

A third or fourth generation descendant of the Maytag (appliance) family, Fritz was fresh off earning a masters in Japanese (or something equally esoteric) from Cal. “I didn’t have to work another day in my life,” he shared. Fritz turned to the ad guys and asked if they’d be interested in selling the toilet-spiraling company. Yes.

Commencing with nary a clue about how to make beer, let alone run a brewing company, Fritz and his secretary set forth. Part chemist, part craftsmen, part bottler, part labeler, part deliverer, they brewed their first batch. And then another. The beer – Anchor Steam was and remains their flagship delicacy – got better, consumers multiplied, and taverns throughout the city ordered more and more barrels. A craft – microbrewing – was invented as the company was reinvented.

My favorite (and Fritz’s personal pride): Anchor’s Christmas Ale. Fritz road-trips every year to handpick and procure unique ingredients for the annual recipe, a little nutmeg here, a special crop of hops there. From their site:

The Christmas Ale’s recipe is different every year—as is the tree on the label—but the intent with which we offer it remains the same: joy and celebration of the newness of life. Since ancient times, trees have symbolized the winter solstice when the earth, with its seasons, appears born anew.
Just another story, eh? Not quite. Beer to Fritz was more than hops, barley and water. The business was more than a business. He stood before our wide-eyed class, paused in the tradition of Paul Harvey, hoisted a bottle of Anchor, and opined, “I love my product.” It was the most sincere, genuine, passionate, and memorable reflection I’ve experienced. To that day – in his late sixties and 30-plus years into running Anchor – Fritz visited taverns throughout San Francisco, changing kegs, stocking refrigerators, telling tales.

Fritz shared a story that night and, along the way, taught us a little about economics (and a lot about life). Cheers.

Tuesday, December 11, 2007

Panhandling

I met with a company last week that’s on to something. What, I’m not sure – the company is headed in a half-dozen potentially viable directions – though I’m confident they’ll give it a good run.

The pre-revenue, bootstrapped company is being pulled to a fro. Do this, go there, change that; advice -- mostly sage -- percolates in droves. Included therein is direction to write an executive summary and business plan. For whom and why?, I asked. (Well, for investors and because we were told that’s what we need to do to raise money, they replied.) Such are the erroneous rules of the game.

My advice was contrarian and, I’m sure, confusing: Cease the game of trying to appease potential investors. Halt any efforts to write an exec summary or bplan, or build a five-year P&L (by now I’m leading my sermon atop a chair in the coffee shop). Invest your energy in two areas: Luring users (it’s a Web 2.0 co) and generating revenue. Assume you will not raise any outside money. Build it – a monetizable community of engaged users – and they (investors; if you desire) will come. Worst case: You have a self-sustainable business (or, if it doesn’t work, you have not failed on someone else’s dime). My helium exhausted, I sedated into my seat.

Building on the “someone else’s dime” (or OPM: other people’s money), I was reminded of the dissonance between an entrepreneur’s perception and the reality of employing outside capital. I have spent a lot of time on both sides of the dime: either starting or helping companies that require outside capital, or investing directly (or indirectly through funds) in such companies.

Raising capital – in the right situation and from the right investors – is a great thing; the positives outweigh the negatives, and the relative degree of potential success is heightened. Think mass x velocity = momentum, or the running a marathon solo vs. running it with a team analogy.

It’s imperative, though, that entrepreneurs panhandle with open eyes: The accountability, responsibility, and expectations (to your investors) can be daunting, and the organization, governance and decision-making (at the board level and elsewhere) is, well, different. It’s not entrepreneurship in its true sense: It is the formal, professional and fiscally prudent management of resources as a fiduciary. It’s the difference between being a kid and a grownup, which reminds me of one of my idols, Peter Pan (speaking, I’m sure, on behalf of most entrepreneurs; Peter was anything but a panhandler):

I won't grow up,
I don't want to wear a tie.
And a serious expression
In the middle of July.
And if it means I must prepare
To shoulder burdens with a worried air,
I'll never grow up, never grow up, never grow up
Not me.
It’s easy to handle a pan and there are plentiful passersby who may chip in a dime. The true challenge is deciding whether you need to play (and are up to playing) with other people’s money.

Friday, December 7, 2007

Fish wrap

I’ve lamented the demise of newspapers, perhaps too personally. As a kid I pedaled papers (Bee, Chronicle and Davis Enterprise routes), wrote for the high school paper (The Davis High Hub), and did the same in college (The Mustang Daily) as a journalism undergrad. Fearful that the newspaper industry is perishing, I donned my old reporter’s cap this morning and dug deeper.

Good news: On an average day, roughly 51 million people still buy a newspaper, and 124 million in all still read one. Newspapers' online ad revenue increased 31.5% in 2006 to $2.7 billion. In the first quarter of 2007, online ad revenue increased 22.3% to $750 million. Still, online represented just 5% of the $49.3 billion in total newspaper ad revenue in 2006.

Which leads to the bad news: Tangible ad revenues are in a tailspin, especially cash-cow classifieds (which are off 15% or more in the past year). The convenience and efficacy of searching for a job, finding a car, or perusing real estate listings (the three cardinal classified classes) is profoundly superior online.

Newspapers are in the advertising business. Yes, they relay news, but it’s a means to attract readers who will view advertisements. Content -> Audience -> $. No audience = No ads = No news. As the content’s appeal and reach increase, so too – not necessarily linearly – does readership and revenue. It’s a pretty simple equation.

Which leads to my first-ever multiple-choice blog question: If you are an advertiser posed with a binary choice, which would you choose?

a. A micro-targeted solution where you pay to communicate with prospective customers – one-by-one – who have proactively sought you out and who seek to engage in a conversation.
b. A mass-media alternative where you pay to speak at/to a somewhat faceless aggregate of readers, whether they read your ad and/or are interested in your product or not, in hope that they will react.
Duh. Effective marketing is pretty simple: It engages interested consumers in a meaningful conversation on their terms and with their permission. Traditional – newspaper – advertising falls far short.

Critics lampoon print media’s inability to effectively monetize their readership, their too-late apathetic adaptation to consumer needs. As newspapers bleed, solutions abound. Here’s a year-old take from Freakonomics, Another Way for Newspapers to Not Die, picking up on an SF Chronicle column by Peter Scheer.
... the most interesting point in Scheer’s article is his proposal for how newspapers can protect their value: by placing a 24-hour embargo on their original reporting, not allowing it to appear on free Internet sites until a newspaper’s paying customers have had first crack at it.
Wait, I’m lost: The solution is to penalize readers – and discourage advertisers – by embargoing news, thereby creating or protecting value? Give me more …
“The point is not to remove content from the Internet,” Scheer writes, “but to delay its free release in that venue. A temporary embargo, by depriving the Internet of free, trustworthy news in real-time, would, I believe, quickly establish the true value of that information. Imagine the major Web portals — Yahoo, Google, AOL and MSN — with nothing to offer in the category of news except out-of-date articles from ‘mainstream’ media and blogosphere musings on yesterday’s news. Digital fish wrap.”
Freakonomics laments the challenge – neutering consumer expectations of receiving something for free – while embracing the concept:
… it is a very intriguing idea, maintaining the value of a besieged commodity simply by shifting the time frame of its use.

It takes a lot of time and a lot of money to produce good reporting. Most people who consume good reporting don’t seem to know this, or care to know it. But they will certainly figure it out if the good reporting begins to disappear because media owners can no longer provide the kind of product we’ve become accustomed to getting for free.
Newspapers as we know them will not go away. Consolidations will continue, staffs will be trimmed, content will suffer, and the weak will swim with (perhaps wrap?) the fishes.

++++++++++++
Post-script (17 Jan 08): From Editor and Publisher:

In the most radical move from print to digital advertising by a major newspaper, the Chicago Tribune announced Monday it is eliminating help-wanted [classified] ads from the newspaper on weekdays.

Opines Andreessen: One small step for classifieds, toward the inevitable large step of shutting down the print edition of the newspaper entirely.

++++++++++++
Post-script (03 Feb 08): The Great Andreessen -- how does he do it/where does he get the time? -- further forecasts the morbid clouds in newspaperland: Inaugurating the New York Times Deathwatch. Painful by worthy read.

++++++++++++
Post-script (04 Feb 08): Chris Anderson chimes in with his perspective of the future of radio. "... now that I've switched to an iPhone [atta boy, Chris!], I've noticed a different behavior. I'm listening to more and more of my favorite NPR shows (This American Life, Terry Gross's Fresh Air, Science Friday, etc) as podcasts, something that finally suits me thanks to having a phone that automatically loads the latest shows." He predicts radio is going to get microchunked, just like the rest of media:
The podcast model is getting cheaper and more ubiquitously available (who doesn't have a cellphone?), and it serves individual needs and taste better. Meanwhile the broadcast model, which is all about one-size-fits-all taste, is based on human labor costs and costly transmission equipment and is only getting more expensive. You can see how this story ends.
++++++++++++
Post-script (17 Feb 08): Andreessen shares -- Irony is dead, last gasp of newspaper industry edition -- pieces from the NY Times and Newsweek. "Executives involved said the newspaper companies understand [by which they mean, "used to have a local monopoly but don't anymore"] the local market better than Google, Yahoo and Microsoft..." The ultimate belated (fatal?) pull-your-head-outta-the-sand realization.

++++++++++++
Post-script (17 Apr 08): Andreessen is back (not that he ever left), scribing about The Birth of Newspapers. He looks back at the first fish wrap conceived after the invention of movable type ... a taste:

Aretino could have done something constructive with his little publication. He could have written about Florence under the Medicis becoming the center of art and humanism in the Western world. He could have written about the founding of the University of Palermo, which would soon be a major institution for the advancement of learning...

Aretino did none of this.

Instead, he "produced a regular series of [anti-religious] obscenities, libelous stories, public accusations, and personal opinion". The opinion was boldly, and often vulgarly, expressed. It was also for sale, with Aretino running a kind of protection racket on those who were the subjects of his stories: pay what he asked and he praised you; refuse and you were slathered with abuse.

Good stuff. He wraps (more to come):
And we see the nature of the birthing pains of a new medium -- any new medium -- and obviously, all of the birthing pains of the modern consumer Internet are trivial in comparison to the mind-boggling headwinds the original newspaper entrepreneurs faced.

Thursday, December 6, 2007

Mix it up

One of my first businesses was an ill-fated venture with my friend Elvis. The Fonz was Eddie Haskel-esque in his ability to con all-comers to purchase a mix tape (TDK SK-90, of course), loaded with their favorite tunes. Three bucks a tape, if memory serves; we made less than a mint. I spun the vinyl (Elvis Costello, The Clash, OMD, Depeche Mode, and UB40 were faves), Elvis loaded a bowl, and the world (e.g., a handful of Davis teens) was musically a better place. The scratch of the between-song needle resonates today, as does the predictable source of our failure (Elvis got high on our own supply, giving away tapes to too many enamored amigas).

A Springwise post, Music Promotion with a Profit-Sharing Twist, reminded me of our bygone days.

Similar to GoodStorm's MixTape, which we covered earlier this year, Mixaloo is an online venture that lets music lovers create, distribute and sell custom mixes of the tracks they love and receive a share of the profits in return.
Twenty-five years later, companies are mimicking our juvenile efforts. Tell me more ...
Mixaloo, which just opened its doors to the public a few weeks ago [little late to the party, eh?], allows music fans to choose from more than 3 million songs [we boasted 200 or so albums; 3,000 songs, max] when they create their mix, including every major label and thousands of independent artists. Based on their searches, Mixaloo also suggests related artists to consider [intuitive search engines and vast choice? We called the shots.]. Once users finalize their mix, they can distribute it with 30-second song samples inside a widget to any personal or social networking website, or email it directly to their friends [email did not exist; our customers could pirate our pirated product by copying a tape for a friend].
Enough sarcasm; there's a valuable lesson therein:
"Everyone's favourite songs are closely tied to the experiences and memories they represent, which makes creating and sharing mix tapes such an enjoyable way for people to express themselves," explains Mark Stutzman, Mixaloo's cofounder and CEO. "We created Mixaloo to merge that experience with the viral nature of blogs and social networking communities, giving users the added incentive of earning cash for popular mixes. This 'social record store' creates a vast network of personal recommendations to increase sales and visibility for artists of all sizes."

1+1=3

My oldest son is a math wizard. Proud parent that I am, I posed the following equation: Scott, what’s one plus one? Two, dad, c’mon. Nope, sometimes it’s three. Remember the Jack Johnson tune, "Three is a magic number, yes it it, it's a magic number"?. You’re wrong, dad, and you’re nuts.

Nuts, yes. Wrong, no. Here’s why:

In business we practice musical, hopefully magical math, seeking scenarios where one plus one equals three (or more). Here are three examples:

  1. Solutions: The essence (or efficacy) of innovation is the combinatorial ability to merge two or more existing elements where the sum is greater than the parts. This added, or differential, value is the essence of your being. An example: Solar is an increasingly economically sensible and pragmatically desirable alternative energy source. Desalinization is the no-duh answer to the world’s potable water thirst, but the economics of conversion are cost-prohibitive. What if – this has gotta exist – a solar-powered desalination solution evolves? Simple math.
  2. Mergers: At last check, a majority of company consolidations fail. One plus one equals less than two. When contemplated (and when executed successfully), the proposition of merging two or more organizations makes sense: Value (the sum of the conslidation) is buoyed thanks to economies of scale, procurement economics, product/solution combos, industry leverage, and business development virtues. When it works, it's magic.
  3. Teams: My brother-in-law relayed (and I paraphrase) an apt analogy: If you’re going to run a marathon, it’s a lot harder to go it alone. Running a relay – teaming with others, be it managers, investors, advisors, or partners – is a heck of a lot easier, let alone efficacious. Think of the Advil you'll save too.
When 1+1=2, you’re playing with flash cards; the results are algorithmically predictable. When the sum of the parts is greater than the whole, the flip side of the card is yours to calculate.

++++++++++
Post-script (1/10/08): My comrade Redwood chimes in with a fact-loaded and metric-filled post about Affordable Desalination, along with a read-my-mind (full disclosure: Wood and I explored this over a few beers in December) article about Photovoltaic Desalinization. There's a there there and the math computes. What's missing?

Monday, December 3, 2007

POTW: Racing down the hydrogen highway ...

In the wake of my fail fast/better post, Andy Hargadon checks in with our post of the week. Andy gets it: He has an innate ability to teach innovation (is it an art or science?), bring business people and scientists together, and pragmatically filter theory and propaganda. (BTW, if you haven't read his book, How Breakthroughs Happen, procure an early xmas gift.)

Andy takes a provocative look at the residue and roadkill of failed technologies, evidenced by the contemporary tough times of ethanol and hydrogen. Quick take:

What interests me is the question of what happens when good technologies go bad--when promising technologies are brought to market prematurely, with too many promises made and too few kept. It happens in countless start-ups, when emerging technologies turn out to need twice (or more) the development time than their business plans promised and in large organizations, when the demands of Wall Street made it too tempting to accelerate the next generation technology.

When the inevitable disappointment comes, the technology becomes a pariah--outcast and shunned. Unfortunately, the scientists and engineers who worked their tails off trying to deliver on the unrealistic promises, usually get hit the hardest: "There goes ol' Burt--he worked on the Newton project. Hasn't been the same since." And another promising technology is set back decades (and the generation who pioneered it is lost) for no other reason that that very promise.

Fail fast. Fail better.

At Venture Lab we had a mantra: Create. Innovate. Accelerate. I can’t claim to investing much time in its creation – we probably had a gotta-make-t-shirts itch – but our employment of the mantra was acute. If Venture Lab was an embryo today, I might tender a new rallying cry: Fail fast. Fail better. Here's why:

In the midst of refining our investment thesis for a network of early-stage investment funds, we’re hammering through the why, what and how of our funds. The why is obvious: To generate superior investment returns, to build local economies and wealth, and to have fun. The how (for now/on paper/pre-implementation) is pretty algorithmic too: Blocking and tackling your way through scenario (portfolio allocation and investment timing) and structural planning. Boring but necessary stuff that MBAs inhale in their sleep.

It’s the what (the lens we’ll employ to [hopefully] advantageously source, make and manage investments) that’s interesting. Not the obvious stuff – invest early, often and diligently in capital-efficient, high-potential, differentiated companies and great teams – but, to quote derelict Donald Rumsfeld, the unknown unknowns.

A company’s likelihood of success is directly related to its ability to adapt. Companies that fail fast, frequently, and smartly are more likely to succeed than those that fail slow (and have trouble changing directions) or do not, as they sedentarily gaze at their navels, fail at all.

All companies fail, though most failures are not fatal. As the potential for returns increases, so too does the likelihood of opening the wrong door, or steering down an erroneous path, or hitting a wall. Think mass x velocity = momentum, where momentum can be good or bad. (If it costs seven figures to open a door and you have to open lots of doors, get used to being lonely in the dark.)

All companies begin with a reason for being: a business model or hypothesis of value. All companies – by virtue of being a company – start down a path. This path is most always the wrong path; the original business plan does not pan out.

One of the cool things about small companies is that they’re inherently nimble and thus can adapt and transform quickly. Take venture-backed companies: As the stakes increase (mass x velocity), the momentum of their failure intensifies.

Venture dollars are best spent in the practice of failing: Finding the right path, the right model, the gotta have value proposition. From there, scaling the business (allocating resources to most expediently maximize returns) is simple math. Risk is mitigated, the path is illuminated, and execution is methodical.

Getting there – failing fast and frequently – is the fun part.

++++++++++
Post-script (17 Jan. 08): Relevant satire in the Onion, spotted by the Great Andreessen, "confirming decades of Silicon Valley conventional wisdom":

In a stunning reversal of more than 200 years of conventional wisdom, failure—traditionally believed to be an unacceptable outcome for a wide range of tasks and goals—is now increasingly seen as a viable alternative to success, sources confirmed Tuesday.

"Americans have always been told that they should succeed at all costs," Emory University sociologist Dr. Lauren Hodge said. "But based on new evidence, this can no longer be called true—if, in fact, it ever was. As failure continues to dominate the American landscape, this mantra must be overruled."

"We have no choice but to revoke failure's non-optional status, effective immediately," Hodge continued. "Now all citizens will be able to step back, stare down the hardship and difficulty they will face in the pursuit of success, and say, 'Fuck that—this isn't worth it.'"

++++++++++
Post-script (29 Feb 08): Interesting take from Dharmesh Shah in OnStartups about why startups fail. Quick tease:
One thing I've been pondering this weekend is figuring out why startups fail. But, in order to figure that out, I had to first decide what constitutes failure. The more I thought about it, the more I realized that a definitive failure is when the startup simply stops trying. And, the only reasons to stop trying are that you run out of cash, or you run out of commitment -- or both.
++++++++++
Post-script (16 Mar 08): Unearthed a thoughtful post from the great Bob Sutton, Failure Sucks But Instructs. A taste:

There is no learning without failure. No creativity without failure. That is why Jeff Pfeffer and I argue that the best single diagnostic question you can ask about an organization is: What Happens When People Fail? ... Diego and I, in teaching our first d.school class on Creating Infectious Action, initially tried to put too pretty a face on failure. We talked to the class about treating everything as a prototype, which we believe in strongly. We preached bout failing forward, failing early and failing often, and used a a host of other pretty words to talk about the good things that happen when things go badly. Yet these is no denying that going down a failed path is still no fun, even if it is a short journey. So after out students --- under our guidance – were especially unsuccessful at promoting a hip-hop concert (despite trying very hard, look at this cool poster one team made), we realized that the most honest thing to do was to deal with our feelings of disappointment, to talk about how much it sucked to have such a lousy outcome, and then turn to the learning.

++++++++++
Post-script (17 Mar 08): A few relevant slices from Paul Graham of YCombinator on How Not to Die ...

The metaphor people use to describe the way a startup feels is at least a roller coaster and not drowning. You don't just sink and sink; there are ups after the downs.

Another feeling that seems alarming but is in fact normal in a startup is the feeling that what you're doing isn't working. The reason you can expect to feel this is that what you do probably won't work. Startups almost never get it right the first time. Much more commonly you launch something, and no one cares. Don't assume when this happens that you've failed. That's normal for startups. But don't sit around doing nothing. Iterate.


++++++++++
Post-script (03 Apr 08): Andreessen adds to the conversation r.e. the role of curiosity and failure (scroll to the bottom for the morsel):
… the lack of curiosity can be a huge danger to a startup in the following way: often, your initial strategy won't quite work, but you can learn as you go based on other things that happen in the market and eventually iterate into a strategy that does work. Obviously, insufficient curiosity can prevent you from seeing the new data and lead you to continue to pursue a losing strategy even when you wouldn't have to.

Wednesday, November 28, 2007

Wear sunscreen

My oldest son met Ernie Ells several moons ago. He (Scott) was zero (not yet one; believe he was nine months old) at the time. Doubt he remembers it, but my wife and I share a fond recollection. Ernie approached us between shots -- it was a screw-around one-day exhibition at Lahontan -- and motioned to Scott, who was passed out on my back. "Is he wearing sunscreen?" Ernie inquired about our Scandinavian-skinned son. As first-time parents we quickly bi-nodded like two bobblehead dolls or chortling hyenas. "Good," Ernie surmised.

I mused back in May about Kurt Vonnegut's erroneously attributed commencement speech, which commenced as so:

Wear sunscreen. If I could offer you only one tip for the future, sunscreen would be it. The long-term benefits of sunscreen have been proved by scientists, whereas the rest of my advice has no basis more reliable than my own meandering experience. I will dispense this advice now.
Artrepreneur, a blog engaging the collision of art and business, reminded me of Kurt and Ernie this afternoon. The blog's author creatively and coolly parodies the "wear sunscreen" speech. Here's the start:
Ladies and gentlemen of the world of art and craft,

Stretch.

If I could offer you only one tip for the future, stretching would be it. The long-term benefits of stretching have been proved by scientists, whereas the rest of my advice has no basis more reliable than my own meandering career path. I will dispense this advice now.
The parody rolls from there ... here are a few good chestnuts for entrepreneurs and artrepreneurs alike:
  • Don't worry about the future. Or worry, but know that worrying is as effective as trying to solve a design problem by throwing a tantrum, or scrubbing a toilet. The real troubles in your life are apt to be things that never crossed your worried mind, the kind that blindside you at 4 pm on some idle Tuesday.
  • Do one thing every day that scares you.
  • Play.
  • Color outside the lines.
  • Maybe you'll prosper, maybe you won't. Maybe you'll be famous, maybe you won't. Maybe you'll be in a museum, maybe the Ugly Necklace contest is the only one you’ll ever win. Whatever you do, don't congratulate yourself too much, or berate yourself either. Your choices are half chance. So are everybody else's.
  • Enjoy your creativity. Use it every day, and in every way. Don’t be afraid of it or of what other people think of it. It's the greatest tool you'll ever own.
  • Turn up the music and dance, even if you have nowhere to do it but your studio space.
  • Accept certain inalienable truths. Costs will rise. Prices will fall. Some people will copy. You too, will get old. And when you do, you'll fantasize that when you were young, people bought craft, nobody copied, and everyone adored artists.

Tuesday, November 27, 2007

Living

A friend of mine lost a family member recently. It reminded me of the morbid perpetuity of death. I do believe in celebrating a person’s life – especially when they’re with us – but I do not buy theological after-life, he/she’s in a better place musings. When you’re here, you’re here; when you’re gone, you’re gone. There’s no good way or good time to go.

But, when you’re here (and I presume there’s a here here, since you’re reading this), your vitality is in your hands. No excuses: You have a tabula rasa (Aristotle: What the mind thinks must be in it in the same sense as letters are on a tablet which bears no actual writing; this is just what happens in the case of the mind). How you live – what you do, who you interact with, what you create – is up to you.

Since you do have a choice, I tender you’d prefer to Live (like totally, to the max [to heist a quote from Valley Girl] with a capital, bold-faced L). To do what you want to do, to go where you want to go, with whom you’d like and when you desire.

Which saunters to my point: Play.

When I think of mentors -- people I endeavor to emulate -- there are two commonalities: They all play (do what they do because they want to, and enjoy it to boot, with little regard for how people perceive them), and they’re a little nuts. As Jimmy Buffett strums, there's a little bit of fruitcake left in everyone of us; my mentors have a lot of fruitcake in each one of them.

Mike Ziegler (CEO of Pride), Sally Edwards (founder of Fleet Feet and several dozen other athletic-centric companies), Buffett, and my late father play (and played). Life is a game they engaged with a childlike, curiously crazy, entrepreneurial enthusiasm. They are full of vitality. They are living. They proactively embrace life. Things do not happen for a reason; they happen because they make it happen.

Mark Twain opined that play and work are words used to describe the same activity under different circumstances. Play (thanks, Wikipedia) is oft defined as a frivolous and non-serious activity (think of those who prescribe such definitions; they’re working, not playing, for a living, reactively sleepwalking through life). Work is compulsive; play is natural and free, intoxicating and invigorating.

Back to Buffett for the wrap:

Oh, yesterdays are over my shoulder,
So I can't look back for too long.
There's just too much to see waiting in front of me,
and I know that I just can't go wrong
With these changes in latitudes, changes in attitudes,
Nothing remains quite the same.
Through all of the islands and all of the highlands,
If we couldn't laugh we would all go insane.
+++++++++
Post-script (17 Jan 08): Cool post from Seth Godin ...

A workaholic lives on fear. It's fear that drives him to show up all the time. The best defense, apparently, is a good attendance record.

A new class of jobs (and workers) is creating a different sort of worker, though. This is the person who works out of passion and curiosity, not fear.

The passionate worker doesn't show up because she's afraid of getting in trouble, she shows up because it's a hobby that pays.
+++++++++
Post-script (14 Feb 08): A morbidly humorous Dilbert take, Death by Frozen Poop, about mortality from Scott Adams. In its entirety:

I know there is something wrong with me because I enjoy reading stories about frozen waste from airplane bathrooms that falls to Earth and almost kills people.

http://www.cbc.ca/canada/calgary/story/2008/02/07/ice-roof.html?ref=rss

When I think of the ways I could die, almost all of them are better than being killed by flying poop. That’s the sort of thing that could erase a lifetime of accomplishment. I would instantly stop being the guy who created Dilbert and forever be known as the cartoonist whose head was crushed by a turd. If I die from frozen restroom waste, my friends and family would have trouble stifling a laugh. And who could blame them, really?

“How did he die?” someone might ask. “I guess you could say he got pissed off,” one of my ex-friends would reply, before laughing heartily.

It seems unlikely I would be killed by airplane waste, but it also seems unlikely a bird would crap exactly in the middle of my bald spot, and that happened. I don’t rule anything out. When I hear jet sounds, I stand under a doorway.

Imagine what would happen if I were doing a book signing, and the frozen waste from the plane missed me, but killed the guy standing in line waiting for my autograph. When telling the story later, would I be able to resist saying “The shit hit the fan”? I think not. And that is why I probably deserve to be killed by frozen poop.

No assholes

I’ve never met Bob Sutton, but I think I like him. Dr. Sutton is a prof at Stanford, cofounder in the Stanford Technology Ventures Program, and a cofounder and active member of the new “d.school,” a multi-disciplinary program that teaches and spreads “design thinking.” He is also an IDEO Fellow and author of several (have yet to read any of them) books, including The No Asshole Rule. (If I had the talent and ambition to author a like book, it probably would be entitled The No Scallywag/Ferret/Fathead/Bozo/Eyeore Rule; that said, “asshole” is an apt label.) Sutton’s my kind of guy.

Sutton’s blog is bountiful and provocative. Dig around and you’ll quickly kill an enjoyable half-hour or three … a recent post, Realists vs. Idealists: Thoughts about Creativity and Innovation, is tremendous. Quick excerpt: … in innovation, the people who precisely quantify – or try to quantify – the risks of any new idea can often come up with excellent reasons why a particular idea is likely to fail (Eyeores!), and indeed, since most new ideas have a high failure rate, they are usually right when their logic – whatever numbers they assign – is applied to any particular new idea.

Sutton’s thinking is encapsulated in “15 Things I Believe,” a terse treatise for creators, entrepreneurs, innovators, and anti-assholes:

1. Sometimes the best management is no management at all -- first do no harm!
2. Indifference is as important as passion.
3. In organizational life, you can have influence over others or you can have freedom from others, but you can't have both at the same time.
4. Saying smart things and giving smart answers are important. Learning to listen to others and to ask smart questions is more important.
5. Learn how to fight as if you are right and listen as if you are wrong: It helps you develop strong opinions that are weakly held.
6. You get what you expect from people. This is especially true when it comes to selfish behavior; unvarnished self-interest is a learned social norm, not an unwavering feature of human behavior.
7. Getting a little power can turn you into an insensitive self-centered jerk.
8. Avoid pompous jerks whenever possible. They not only can make you feel bad about yourself, chances are that you will eventually start acting like them.
9. The best test of a person's character is how he or she treats those with less power.
10. The best single question for testing an organization’s character is: What happens when people make mistakes?
11. The best people and organizations have the attitude of wisdom: The courage to act on what they know right now and the humility to change course when they find better evidence.
12. The quest for management magic and breakthrough ideas is overrated; being a master of the obvious is underrated.
13. Err on the side of optimism and positive energy in all things.
14. It is good to ask yourself, do I have enough? Do you really need more money, power, prestige, or stuff?
15. Jim Maloney is right: Work is an overrated activity.
Reminds me a little of (paraphrased) Dr. Kilgore Trout (Vonnegut): Our purpose in life is to fart around.

Sunday, November 25, 2007

Timequake

Breezed through Vonnegut’s Timequake this weekend, a whimsical, esoteric, moralistic and funny page-turner. Two relevant (to this blog) morsels to share:

First, Vonnegut’s recap of an interaction with his alter ego (Kilgore Trout):

The first story Trout had to rewrite after the timequake zapped him back to 1991, he told me, was called “Dog’s Breakfast.” It was about a mad scientist named Fleon Sunoco, who was doing research at the NIH. Dr. Sunoco believed really smart people had little radio receivers in their heads, and were getting their bright ideas from somewhere else.

“The smarties had to be getting outside help,” Trout said to me at Xanadu. While impersonating the mad Sunoco, Trout himself seemd convinced that there was a great big computer somewhere, which, by means of radio, had told Pythagoras about right triangles, and Newton about gravity, and Darwin about evolution, and Pasteur about germs, and Einstein about relativity, and on and on.

“That computer, wherever it is, whatever it is, while pretending to help us, may actually be trying to kill us dummies with too much to think about,” said Kilgore Trout.
Next, more Trout:
Only after he had completed his own absorbing business, the story, was Trout at liberty to notice what the outside world, or, indeed, the Universe, might be doing now, if anything. And as a man without a culture or a society, he was uniquely free to apply Occam’s Razor, or, if you like, the Law of Parsimony, to virtually any situation, to wit: The simplest explanation of a phenomenon is, nine times out of ten, say, truer than a really fancy one.
Reminded me of Blink, along with myriad rants herein about simplicity. Intrigued by the nonfiction of Vonnegut’s creative nonfiction, I Wiki’d deeper:
Occam's razor (sometimes spelled Ockham's razor) is a principle attributed to the 14th-century English logician and Franciscan friar William of Ockham. The principle states that the explanation of any phenomenon should make as few assumptions as possible, eliminating those that make no difference in the observable predictions of the explanatory hypothesis or theory. The principle is often expressed in Latin as the lex parsimoniae ("law of parsimony" or "law of succinctness"): "entia non sunt multiplicanda praeter necessitatem", or "entities should not be multiplied beyond necessity".

This is often paraphrased as "All other things being equal, the simplest solution is the best." In other words, when multiple competing theories are equal in other respects, the principle recommends selecting the theory that introduces the fewest assumptions and postulates the fewest entities. It is in this sense that Occam's razor is usually understood.

Originally a tenet of the reductionist philosophy of nominalism, it is more often taken today as a heuristic maxim (rule of thumb) that advises economy, parsimony, or simplicity …

The Octopus

I wrote last week about why, the imperative of focusing – personally and entrepreneurially – on the root, not the obvious activities, of your doing. It’s lazy and perhaps overly philosophical to offer such a thought, but I continue forth.

Beyond, or perhaps inherent within, the why are forces that drive activity. (Back in July we explored the virtue of opportune [obvious?] scenarios where demand > supply.) A primary example is demand: Once such a force, to whatever degree it may catalyze a person’s decisions or a company’s progress, emerges, grab its tail. Or, in tonight’s blog-a-blah blah, its eight legs.

Thumbing through The Literary Book of Economics tonight, I thumbed upon Frank Norris’s 1901 opine, The Octopus: A Story of California. Norris asserts individuals decide what they will buy and produce, but in many ways market forces for goods and services operate automatically and impersonally. My take: The what and how are less relevant; the why -- the forces -- count (i.e., drive market activities). His take:

You are dealing with forces, young man, when you speak of Wheat and Railroads, not with men. There is Wheat, the supply. It must be carried to feed the People. There is the demand. The Wheat is one force, the Railroad, another, and there is the law that governs them – supply and demand. Men have only little to do in the whole business. Complications may arise, conditions that bear hard on the individual – crush him maybe – but the Wheat will be carried to feed the people as inevitably as it will grow.

Friday, November 23, 2007

POTW: ScreenWritEntrepreneurs

You may recall our buzz-buzz post about Mark Cuban's drive to democratize movie production and distribution. And, if you've enjoyed The Long Tail, you may savor the water torture-esque death of major movie studios (nothing like the amusement of listening to an arrogant industry/balloon whistle and deflate its way to limpness!).

Our post of the week amplifies, courtesy of the LA Times, Marc Andreessen's ongoing communique about the writers' strike ... here are a few quick takes (read the whole post; it's good):

Hollywood is a town awash in hyphenates. TV is loaded with writer-producers. The movie biz is full of writer-directors. There's even a legion of actor-filmmakers like Clint Eastwood and George Clooney. But as the writers strike enters its third week, I think the future belongs to a tantalizing new hyphenate: the writer-entrepreneur.

... "Writers who create something rare -- a story with great, original characters that movie stars will cut their price to play -- have a real value," says Mandate production chief Nathan Kahane. "But that value doesn't get unlocked in the studio system. If writers are willing to share our risk, then we're willing to give them a lot of control and share in the profits too."

This kind of entrepreneurial formula couldn't have existed in the era when the studios had a stranglehold on every facet of the business, notably talent, money and distribution. But those days are gone. The stars became free agents long ago. In the last few years, with billions of private-equity dollars flooding the business, the studios have lost their lock on financing too.

... "The world is about to change," Frank says. "Anyone with an Apple computer can make a movie now -- it's never been a more democratic medium. The studios should be very afraid. Once the independent financiers start going directly to writers, things could change really fast. I ask myself every week -- why aren't we all working with them? Look at the movies they've made. They are the new Medicis."

Wednesday, November 21, 2007

Tell me why

I’ve had a collection of experiences of late – pitch meetings with entrepreneurs, strategy sessions with executives, daily conversations with my five-year-old – harkening back to my infancy as a journalism student. One of the first things you learn in copywriting courses is to dissect and construct a story, particularly in your creation of the lead, based on the five Ws (who, what, when, where, why) and one H (how). Articulate these and the remainder of your composition is blocking and tackling verbiage.

Here’s how the aforementioned experiences evolve: The discussions (an entrepreneur’s pitch is the most cardinal example) jump immediately to the what (they’re doing: their product, service, approach), how (they will do it), when (their plan), and the where and who (their market/customer segmentation; the team that will make it happen). All antes, particularly if you’re a get-shit-done entrepreneur; but, something’s missing.

Tell me why, I engaged my comrades, echoing a bad 80s pop band, Bronski Beat. Whadya mean, why, they asked. If my five-year-old son was present, he would have beat me to the punch: Why (fill in the blanks), daddy? he posits daily. (The what, when, where, who, and how have little relevance to inquisitive kindergarten pupils.)

I harkened back again, this time to the late Harvard marketing sage Theodore Levitt, who I wrote about back in May. Levitt: People do not want to buy a quarter-inch drill. They want a quarter-inch hole. It’s the result, the experience, the utility consumers desire. It’s your unique ability – your reason for existence – in generating such results/experiences/utility/holes that matters. At the end of the day, customers are ambivalent regarding the what, when, where, who, and how of your business; they do business with you because of the why.

Back to my contemporaneous experiences: The entrepreneurs and executives were, rightly so, donning blinders, intensely focused on doing it. They could smell and see the barn, soldiering forth on plan. After all, that’s what creators do: They create. Philosophers (and bloggers?) live in the land of contemplation, of theoretical why thinking.

But, execution is irrelevant – a waste of time/senseless opportunity cost – if you have not clearly defined and acutely focused on the why of your business, as viewed and valued through the lens of your customers. Makes it a lot easier to pitch a product or plan, let alone communicate with a five-year-old.

Saturday, November 17, 2007

Ode to Arco

We took the boys to see the Globetrotters Thursday night at Arco Arena. The kids (and we) loved it, but something was missing. Not in the on-the-court performance, but the arena. Acro is an aging, charter-less, stale venue. It oozes – from the banged-up plastic seats to the 80s-era concessions to the stale beer aroma to the ambivalent employees – an apathetic malaise. It’s a tired place.

Why and how do things and stuff tire? Think of a book that’s remorsefully halfway read on your nightstand. Or a relationship that drags. Or an environment that lacks spark, intrigue or energy.

When people sincerely care about something, someone, or some place, you can tell. There’s a there there, a genuine dose of helium. It’s the book to read, the person to interact with, or the restaurant to visit. It’s the job that doesn’t feel like work. When it’s missing, it’s obvious.

Companies – collaborations of people focused on accomplishing a mission and making a buck – are cardinal candidates too. When you encounter or help propel a company that has “it,” hop aboard. People are intrigued … they want to be involved, as a team member, investor, customer, supplier, distributor, partner, or advocate.

Flip the coin. Though it’s not binary, you can spot (sense?) a company that is tired. Work is, well, work. Stakeholders float through the motions, artificially pedaling the company’s day-to-day actions. The atmosphere is stale, the people emotionless. To quote Don Nelson, there comes a point where potential becomes notential.

When people care about anything – a book they’ve read and thereby share, a person they meet and want to introduce to others, or an establishment that is cool – shit happens. There’s a certain energy that’s contagious. When the energy erodes, move on. Life is too short to invest your time in tired stuff.

+++++++
Post-script (23 Nov. 07): The Great Andreessen shares an interview with one of his entrepreneurial heroes, Stephen Wolfram ... scroll down for a relevant thoughtbite:

People have different motivations, of course. A lot of people think the big thing with companies is money.

Yes, if you luck out, you can make a lot of money. But it's really rare that money carries people as a motivation.

You have to actually care about what you're doing.

For some people, like me, it's the actual creative content that they care most about. For other people, it's the act of building the company. For others, it's making deals. Or winning against competition.

But there has to be something you really care about.

Wednesday, November 14, 2007

POTW II: MyFootballClub

Here goes the first violation of my Post of the Week policy: A second post of this week. Couldn't resist this one: MyFootballClub Agrees to Buy Team. Take a quick peek ... it's a wonderful democratization of an affinity, part Wisdom of the Crowds, part heretofore unthinkable micro-capitalism, part emotive-string-striking brilliance.

The scoop: MyFootballClub (in less than three months) signed up 50,000 people willing to pay a GBP 35 membership fee (quick math: 1.75mm pounds; $3.6mm) to buy and manage a soccer team with a crowd of other dedicated fans. MyFootballClub members will vote on player selection, transfers and all other major decisions.

Amazing. The crowd (the little guys) now own and control, with their 1/35,000th say, a soccer team. As shareholders, they voted on which club to acquire. As the crowd swells, the company/team can acquire better players and boost its probability of success: on the field, on the balance sheet. Or, they can acquire additional clubs. Or, buy the whole enchilada (the league).

Assuming you can bypass U.S. securities laws -- and presuming you're parked in the States; apparently it flies across the pond -- think of the possibilities: A mass of people with an affinity for (and a few bucks to back) anything, be it a Zoo, a professional sports team (think minor league baseball), a band or performing arts groups, a now-public golf course ... it's endless.

Have fun, be a fanatic, and -- perhaps -- make money.

+++++++++
Post-script (04 Feb 08): Crowdfunding's all the rage, and new derivatives are popping up everywhere. The latest: A professional Bulgarian basketball team is now looking for sponsorship from a crowd of fans.

Springwise: While MyFootballClub first collected enough money from its members and then selected a team to buy, ten-year-old Start is taking a pro-active approach by asking basketball fans to fund an existing team. Start is seeking a minimum of 10,000 people—in Bulgaria and elsewhere—who are willing to sign up before May 1st, 2008, pledging to pay BGN 40 (EUR 20 / USD 30) each if enough other members register to do the same.

Once the money has been collected, the team will organize a basketball camp and try-outs. Training sessions will be filmed and broadcast on nashiaotbor.com, allowing crowdfunders to help spot and vote for talented new players. Akin to MyFootballClub's setup, members will virtually manage the team, voting online on key decisions concerning players and coaches.

POTW: Cycle of a Fan

Inspired by my Gator experience in Gainesville two Saturdays ago, I'm on a quest to enjoy, in person, a major college football rivalry or two each year. Michigan-Ohio State, Auburn-Alabama, Texas-Oklahoma, Notre Dame-SC and a half-dozen others populate my itinerary. I'm hooked.

Or, more aptly, I'm a fan. "Fan," of course, is a derivative of "fanatic":

fa·nat·ic (fə-nāt'ĭk)
n. A person marked or motivated by an extreme, unreasoning enthusiasm, as for a cause.

Which brings me to our Post of the Week, courtesy of Brains on Fire. Cycle of a Fan engages a person's emotional involvement -- the crescendo of extreme, unreasoning enthusiasm -- for a cause. Could be a football team or a sport. Could be a product or a company. Might be a philanthropy or university. Or, a person's advocacy for a cause.

Regardless, it's a provocative look at the logical steps an individual takes in their involvement with most anything. For me, it's a play-by-play CRC (customer relationship cultivation) guide -- the practice of ushering people through introduction, participation, adoption, evangelism, community, and ownership is invaluable. All companies have constituents in each of the six camps. The goal, of course, is to mature their involvement through the lifecycle -- ensuring your engagement moves beyond transient participation and simple adoption. As their involvement matures, so too does the likelihood and viability of their self-referencing.

Monday, November 12, 2007

Who are you?

I’m stuck on a Delta flight listening to The Who on my iPhone. Roger Daltrey: Who are you? Apparently, he really wants to know.

I’ve never thought about it before and if someone posed the question – so, Chris, who are you? – I would probably smirk and take the Fifth. But, since you asked I would spit out demographic vitals, talk about my wife and our two boys, share that we live in Davis, confide that I went to Cal Poly as an undergrad and UC Davis for grad school, express that I love to start companies, exercise, attend sporting events, listen to music and read, and confess my soft spot for pretzels (Bavarian’s are the best), mini carrots, sashimi, Hot Tamales, and Coors Light. Whew. I guess that’s how I would self-reference.

Which is of no relevance to today’s conversation, except to reference the utility of understanding how people self-reference. If you seek to communicate with or sell to someone – anyone – you need to understand how and when and why and to what degree they self-reference. You’ve gotta understand the context of their personal, professional and social networks. I am like him is a great path to understand how the person will behave. After chirping about this – the power of self-referencing -- for more than a decade in my dissection and attack of markets, I experienced an ah-ha while reading Six Degrees, The Science of a Connected Age:

… people know each other because of the things they do, or more generally the contexts they inhibit. Being a university professor is a context, as is being a naval officer. Flying frequently for business is a context. Teaching climbing is a context. Living in New York is a context. All the things we do, all the features that define us, and all the activities we pursue that lead us to meet and interact with each other are contexts. So the set of contexts in which each of us participates is an extremely important determinant of the network structure that we subsequently create.
In the aisle seat to my left – got stuck; I’m the monkey in the middle – is a large man, a specimen who should pay double for a seat (two seats!). Thirty seconds in to our seatmanship I learned he’s a diehard Ohio State Buckeye fan. Sixty seconds later he volunteered that he’s from Canton, Ohio, and takes immense pride in Canton’s housing of the Football Hall of Fame, particularly that 15,000 folks pack the joint for a high school game. He just inhaled a two-pound chocolate bar (no joke) slobbered down with a can of Coke. His right bicep boasts a Fred Flintstone caricature tattoo. Personal hygiene is not a priority; he hasn’t showered for a few days (weeks?). And, he’s reading one of the Narnia books. Not sure what he does for a living, if he goes to church or bowls in a league, or if he’s in to NASCAR or Harleys or whatever. But I bet he relates well to people like him.

Who are you? Lots of people really wanna know.

Scallywag

My friend Redwood can get a little red between the ears. He’s an excitable sort who’s furrowed brow comes with a sprinkle of a smile and a chortle or two, which makes it all the more amusing. Several moons ago, he tipped his pint and commenced a diatribe about a colleague, culminating in an eyebrow-crunching oration: Whatta scallywag, I’ll tell ya!

I froze. Not because of his emotion, but due to my discovery of a new take: Scallywag. Engaged, I dug deeper:

Scal-ly-wag [skal-ee-wag] – noun: a deceitful and unreliable scoundrel

Wood’s vent conjured a few similar personifications.

Ferret, for one. (I bump heads with a local, anything-but-allocentric character who half-lovingly reminds me of mustela putorius furo [a weasellike, usually albino mammal].)

Fathead is another. In the 70s, Fatheads were Grateful Dead-dancing listeners of KFAT in the Bay Area. Today, they’re egotists who have a supreme sense of professional being, shielding an insecurity of social interaction.

Bozo’s a good one too, with credit to Guy Kawasaki’s credo: Don’t let the bozos grind you down. Kawasaki contends there are two kinds of bozos:
  • The slovenly bozo with no credibility.
  • The successful bozo, which is the most dangerous since people tend to believe them.
Scallywag, ferret, fathead, and bozo thinking can be harmful if you employ an Eyeore mindset or if you lose site – through your engrossment with the said character – of the big picture. Think Scott McNealy and his Microsoft must perish quest that nearly killed Sun. (Not sure if McNealy ever referred to Gates as a scallywag, ferret, fathead, or bozo.)

But, I can think of numerous bury-the-scallywag, catch-the-ferret, deflate-the-fathead, or pop-the-bozo scenarios where such thinking was healthy (though, perhaps, too testosterone-ridden tribal?). A common rallying point is created, a target identified, collective motivation corralled. Which works if, in trying to prove the scallywag/ferret/fathead/bozo wrong, you accomplish your objective. And, most importantly, share a chortle or two along the way.

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Post-script (18 Nov. 07): Dug up the below from historian Ted Tunnell on the origins of scally/scalaway:
Reference works such as Joseph E. Worcester's 1860 Dictionary of the English Language defined scalawag as "A low worthless fellow; a scapegrace." Scalawag was also a word for low-grade farm animals. In early 1868 a Mississippi editor observed that scalawag "has been used from time immemorial to designate inferior milch cows in the cattle markets of Virginia and Kentucky." That June the Richmond Enquirer concurred; scalawag had heretofore "applied to all of the mean, lean, mangy, hidebound skiny [sic], worthless cattle in every particular drove."

Friday, November 9, 2007

The Fuzzy Tail

I unearthed a terse, enjoyable post and slideshare presentation from David Armano, VP of Experience Design with Critical Mass. His takes:

  • Left brain? Right brain? Neither. Fuzzy people are "light-brainers" ... they are agile, inquisitive, adaptable, flexible, and pliable.
  • To bolster your fuzziness, forget you were ever an expert. At anything.
  • Unlearn. So you can learn again.
Armano continues in his poignant argument against the binary siloing of (my comparisons, not his) generalists and specialists, hedgehogs and foxes, right-brainers v. left-brainers, and scientists v. artists:
We can no longer afford to over-analyze our challenges. We must try to get things launched—learn from these experiences and refine. We must define ourselves and what we do more broadly while retaining the potency of our our crafts. It's about going from left brain to right brain and ending up on "light brain". We must become "fuzzy".

Being fuzzy as I outline in the deck is about unlearning everything we think we know—so we can actually learn and adapt. It's about less focus on rigid tasks and job descriptions and more focus on bringing our efforts together in the overlaps—where our skills compliment each other. It's about being more nimble and adopting "fuzzy" processes to compliment our tried and true methods that have served us well in the past.

The Fuzzy Tail is my way of saying "we won't become the blacksmiths of our time". It's about pushing past the commodity—the end product or service which can be outsourced. It's about putting aside egos, getting out of silos and mixing it up with each other—I mean really mixing it up. Planners who think like designers—designers who obsess about business—information architects who write—writers who act like strategists—project managers who can direct creative and creative directors who are willing to let them. People who are willing to let others play in their sandbox.

ing

Karen and I enjoyed an event on campus last night honoring the “Chancellor’s Laureates,” individuals and institutions – several hundred benevolent entrepreneurs! – that have given $1mm+ to UCD. The vibe was terrific, hitting a high note when Margrit Mondavi stepped to the podium. Five-feet tall on her tip toes and in heels, she has the grace of a queen and a charm that’s contagious, amplified by a can-we-take-you-home-to-read-goodnight-stories-to-us Swiss accent. Margrit and her husband, Robert, catalyzed a significant transformation of the campus with their $50mm donation to create the Robert and Margrit Mondavi Center for the Performing Arts and the equally jaw-dropping and physically adjacent Robert Mondavi Institute for Wine and Food Science.

Margrit graced the crowd with an extemporaneous talk about creating, giving, doing, making, enjoying, and being. As she said something worth saying, visions of ings danced through my head. Whether you’re a baker who bakes, a candlestick maker who makes, an entrepreneur who creates, or an artist who relates, six maxims (personal challenges?) come to mind:

  • Be something worth being
  • Enjoy something worth enjoying.
  • Play something worth playing.
  • Give something worth giving.
  • Create something worth creating.
  • Do something worth doing.
While “something” and “worth” are subjective, the act of being, enjoying, playing, giving, creating and doing is the essence. It (the ing) is what counts; without it there is no something or worth of your ing-ing. It reminded me of three “as you embark of your walkabout and regenerate” morsels of advice shared by my brother James earlier this year:
Life’s too short to:
  • Do something you don’t enjoy, or
  • Work with people you don’t enjoy, or
  • Work in a location you don’t enjoy.

Wednesday, November 7, 2007

POTW: The Long Tailpipe

I've been musing and prosing lately about the virtues of batteries (versus biofuels) and the when, not if (10 years? 20?), ubiquity of battery-powered vehicles. This week's POTW courtesy of FutureLab: Radically re-thinking the automotive business model.

[Former SAP executive] Shai Agassi’s new gig is called Project Better Place and its mission is to create a new platform and ecosystem for electric cars, and Agassi has raised $200 million to get it off the ground.

What Agassi’s Better Place wants to do is to separate the battery from the car, get automakers to standardize on a single battery type, and then set up a network of charging sites (run by Better Place) where cars can drive through and have their batteries changed. Agassi says that current technology allows for batteries that can power cars for 100 miles.

Under the model that Agassi is proposing, cars would be sold without batteries by the car makers (potentially bundled with batteries by the car dealers) and Agassi’s company would sell monthly subscriptions to consumers for swapping out their batteries at charging sites.

Bottle this

It’s recycling day in south-northern Davis. I just discovered this completely useless factoid during a run, and I have evidence to prove it: I hurdled seven discarded plastic water bottles surrounding their former homes (recycling bins).

The bottles conjured two What ifs?

First, waste: Recycling plastic bottles is an example of doing less of bad. (FYI, check out this post, Coke's Message in a Bottle, assessing The Coca-Cola Company's goal "to recycle or reuse all the plastic bottles we use in the U.S. market".) Several – hundreds – of billions park in landfills and progress through recycling centers each year, let alone scour street corners and pollute oceans. What if you could create a biodegradable bottle? Or, develop a solution to satisfy the convenient, portable, at-your-lips thirst of consumers? Calling all materials scientists for a remedy.

Second, the bottled water biz. I met with two Sacramento Entrepreneurship Academy grads this morning to learn more about their startup. Great concept with some tread of its tires. It beckoned bygone presentations to the Academy where I would ask students: What if, say 15-to-20 years ago, you shopped a business plan with a simple idea: We’re going to put water in bottles and sell it at price points approaching soft drinks. Imagine the chortles from fat-headed VCs; you're going to do what?

I dug up the below excerpt from Who Has Time for This?, a VC’s blog. Therein the author relays his experience with Penn Jilette (of "Penn & Teller"), specifically his “Bullshit” performance wherein he debunks superstitions of all kinds, exposing how easy it is to scam people.

... my warm sense of intellectual superiority yielded to naked shame as I saw myself in the victims of the Bottled Water craze. I watched a cast member, posing as a "water steward" in a California restaurant, present the patrons leather-bound menus from which to select waters bottled in Alaska, the Sierras, the Swiss Alps, and Antarctica. As the patrons sampled the various vintages, they readily celebrated the properties of each water--the crisp Alaskan glacier, the sweet taste of France, and the smooth Sierra rainfall. The camera then filmed the kitchen, where the steward filled all the glasses from a garden hose.

I learned that bottled water is a good idea when traveling overseas, but it's a $22 billion scam in the US. It costs anywhere from 1,000 to 10,000 times the cost of tap water. Unlike tap water, there is virtually no enforcement of health and cleanliness standards, nor is there flouride to prevent tooth decay. The healthiest bottled waters are bottled from tap. And the bottles themselves pose an environmental disaster.

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Post-script (17 Nov. 07): Interesting post here about biodegradable milk bottles. A start?

Monday, November 5, 2007

I want MyTV

I went to a high school football game a few weeks ago. It had been 20-plus years; time froze – same splinter-beckoning bleachers, suds-soaked seventeen year olds, spiritless cheerleaders, stale popcorn, and semi-legible scoreboard. We parked on the top row, sandwiched between the band and a flock of parents, most operating hand-held digital video cameras.

As I type I’m soaring west somewhere above Kansas, returning to Sacramento after a weekend in Florida. Good: Took in my first “real” football game in Gainesville (the Gators rolled; SEC football is truly a religious experience, even for atheists [or agnostics] like me), and my brother James rolled me on the clay courts. Bad: Missed my kids’ soccer (four on Saturday; Ty’s team, the Green Gators, rolled too) and baseball (final game of the year) contests, along with the UCD-Sac State Causeway Classic and another Davis High game. The latter two are less important; missing the boys’ games stinks.

Back to the camera-toting parents and, relevantly, the three key tenets of The Long Tail. The Tail: Make it, get it out there, and, help me find it. The parents: Making it (recording the game). A parent or two at most any youth sports game – including the five I missed Saturday – or performance or birthday party: IBID. The tools of creation – video cameras – are ubiquitous.

But, it’s still tough – though technically feasible – to “get it out there” and “help me find it.” Hence, my dream: MyTV. When my niece Olivia performs in a play in Portland, when my nephew Grant plays soccer in Granite Bay, when my brother James plays in the finals of a tennis tournament in Florida, and when my kids do any and more of the above, I want to watch, share, and archive it. I want a non-commercial TV channel (a personal digital content service?) that’s about me, my family, and our interests, sprinkled with – obviously – commercial content. Mini social networks – with broadcast/streaming/storage capability – where friends and family and parents can share full-length videos.

Impediments: Gotta be bandwidth and storage, though the former is ubiquitous (and improving) and the latter gets cheaper by the day. Some day soon – perhaps it exists; I’m in the air and can’t google it -- MyTV will emerge, a personal TV channel for anyone, delivered for free and available anytime, anywhere. Can’t wait.

Monday, October 29, 2007

Where the money is

I was cemented in a meeting the other day, volleying product, segmentation and pricing ideas to and fro. Enjoyable exchange, but our rallies (thinking) stagnated – where to go, what to sell, for how much, how to go to market, etc. As yet another thought hit the net (or soared beyond the baseline; I forget), I thought about a bank robber and his sage advice.

Willie Sutton liked to rob banks. Lots of them. In a career spanning from the late 1920s to Sutton's final arrest in 1952 -- with a number of prison terms in between – Slick Willie robbed more than 100 banks. When asked why he robbed banks, Sutton opined, "Because that's where the money is."

Sutton shared, with pride, how the medical profession adopted "Sutton's Law"--the idea of looking for the obvious, before going further afield, when diagnosing. The "law" was coined by a medical professor who recalled that Sutton, when asked by a reporter why he robbed banks, had answered with his famous line.

Except it never happened that way. As he later admitted:

"The irony of using a bank robber's maxim as an instrument for teaching medicine is compounded, I will now confess, by the fact that I never said it. The credit belongs to some enterprising reporter who apparently felt a need to fill out his copy...

"If anybody had asked me, I'd have probably said it. That's what almost anybody would say. ...it couldn't be more obvious.

"Or could it?

"Why did I rob banks? Because I enjoyed it. I loved it. I was more alive when I was inside a bank, robbing it, than at any other time in my life. I enjoyed everything about it so much that one or two weeks later I'd be out looking for the next job. But to me the money was the chips, that's all."
It couldn’t be more obvious. Back to our ideation. The answer – what to sell and to whom – crystallized. Follow the money.

Sunday, October 28, 2007

SFOTW: H2O

I seem to encounter more and more mouth-opening, head-shaking facts, mostly about the environment. Initially, my lens is remorseful – Wow, that’s too bad. Eventually (if I reread or re-ponder the thought/fact), my lens is opportunistic: That’s too bad … wonder what we can do to remedy it?

Hence, our SFOTW (sobering factoid of the week) commences with this post. My inspiration this week comes from Yvon Chouinard, founder of Patagonia. I just finished his autobiography (with thanks to my sister, Jess, for the gift), Let My People Go Surfing: The Education of a Reluctant Businessman. Before I get to the SFOTW, here’s an excerpt from the book encapsulating Chouinard’s mantra to “lead an examined life”:

I don’t really believe that humans are evil; it’s just that we are not very intelligent animals. No animal is so stupid and greedy as to foul its own nest – except humans. We are certainly not smart enough to foretell the long-term results of our everyday actions. The brilliant scientist or entrepreneur businessman who invents or develops a new technology is often incapable of seeing the dark side of his ideas, whether it’s atomic energy, television, or farmed salmon.

The problem is a failure of the imagination. In the sycophantic biography of George W. Bush, The Right Man: The Surprise Presidency of George W. Bush, by David Frum, the worst thing said about him is that he was “uncurious.” Uncurious people do not lead examined lives; they cannot see causes that lie deeper than the surface. They believe in blind faith, and the most frightening thing about blind faith is that it in turn leads to an inability, even an unwillingness, to accept facts.
He’s singing our tune; no wonder I love his gear and apparel. Which leads me to our sobering factoid of the week from Maude Barlow, National Chairperson, Council of the Canadians, one that tempts the thirst of examined life living entrepreneurs (unless you’re an uncurious, parched, fact-fearing Republican):
Global consumption of water is doubling every 20 years, more than twice the rate of human population growth. If current trends persist, by 2025 the demand for fresh water is expected to rise 56% above the amount that is currently available.

POTW: A New Prediction Market for the Masses

Prediction markets are fascinating, real-life extrapolations of The Wisdom of Crowds. Of late -- inspired in part post-absorption of The Black Swan and Six Degrees: The Science of a Connected Age -- I've been pondering peer-to-peer, opinion-of-the-masses business models, be it through personal wagering, stock picking, or private company investment. There's a lot of there there, though I'm not sure where (yet). For this week's POTW, Freakonomics (again!) checks in with a thought-provoking post: A New Prediction Market for the Masses. Quick take:

For those of you who love prediction markets, there’s a new site that looks to be as vast, inclusive, and user-friendly as anything I’ve seen: Predictify.
Predictify is very compelling and quite powerful. You can either submit a question or predict an outcome. Poke around ... I think you'll enjoy.