Thursday, May 31, 2007

Clavinisms

Had a beer at Sudwerk last night with my friend Redwood. No agenda; simple liter hoisting and story telling. Before I had a chance to inquire about his wellbeing, Wood spoke: Did you know one quadrillion BTUs is equivalent to about 25 million tons of oil, 28 billion cubic meters of natural gas, 33 gigawatt-years of electricity, 60 million tons of coal, and 180 million barrels of oil? Having just completed a blog post, Redwood was fired up.

The discourse reminded me of Clifford Clavin in Cheers. Cliff would -- seemingly every episode – turn to Norm at the bar and exclaim, “Hey, Normy, it’s a little known fact that …” The facts were irrelevant, obscure, trivial morsels. We named them Clavinisms.

Like Redwood and Cliff, my late dad liked to collect and share obscure factoids. Sturgeon and potatoes were two of his favorite subjects. This morning I unearthed a parched note sheet, circa 2003. It formerly lived above his desk at Technology Development Center, a running list of little-known Clavinisms. A few chortle-inducers and eye-openers:

  • The largest thing in the universe is 1037 bigger than the smallest (Edward O. Wilson).
  • A single Canadian goose shits 3 lbs each day.
  • Every 10 seconds, 126,000 people drink a Coke.
  • California is 100 million acres large, half private and half public.
  • 28 million light bulbs are sold each day.
  • 10100 = a google (my seven-year-old knew this too; not I).
  • And (this would make Redwood happy), 200,000 cases of beer = 17,000 hectoliters.
We’ve got a lot of liter tipping and Clavinisming to go.

Wednesday, May 30, 2007

Swarm

I went for a run Monday through the tomato, sunflower and sod fields south of our house. Ozomatli and The Allman Brothers in my ears, pollen bombs in my lungs, and nothing but open roads for my beat up Nikes. Good run, and then I encountered two beehives. Big, Yao Ming-esque ones. I froze; there were thousands of honeybees, enveloping their colonies. Half naked, I veered left and scurried home, unscathed.

Beehives have always fascinated me. Their organization, sense of purpose, productivity, and frenetic (but disciplined) characteristics are cool. Bees get shit done. (An estimated one-third of the human food supply depends on insect pollination, most of this accomplished by bees.)

Metaphorically, beehives are like startup companies. Here’s wiki’s take with my analogical two cents in parens:

New honeybee colonies (companies) are formed when queen bees (founding executives) leave the colony (former company) with a large group of worker bees (the team), a process called swarming (entrepreneurship?). The first or prime swarm (kick-ass team members) generally goes with the old queen. As soon as the swarm is established as a new colony (established company), the bees raise a new queen (CEO nurtured from within), or sometimes a replacement virgin queen (CEO-in-training) is already present in the swarm. Afterswarms (spinouts; intrapreneurial endeavors; divestitures) are usually smaller and are accompanied by one or more virgin queens (executives in residence; interim CEOs). Sometimes a beehive will swarm in succession until it is almost totally depleted of workers (crash and burn).
A terrific new paper authored by MIT researchers Peter Gloor and Scott Cooper, The New Principles of a Swarm Business, entertains the innovative virtues of collaborative “swarms”. Gloor and Cooper assert the swarming of bees is an archetype of selfless, collaborative innovation:
With no central direction, bees self-organize to build nests, feed and nurture offspring, gather food and even decide on their next queen. Similarly, groups of humans swarming together for a common purpose can constitute a powerful collective mindset that unleashes tremendous creativity, spurring exciting and valuable innovations.
Gloor and Cooper cite the selfless and successful swarm development of the World Wide Web. Good stuff, and we’ll dig deeper into their principles (gain power by giving it away; share with the swarm; and, concentrate on the swarm, not on making money) in the coming days.

The I and the We

The latest Technology Review, MIT’s superb journal, features an eye-opening and somewhat disturbing essay, The Trouble with Knowledge. Tender a glass of your favorite libation and settle into a comfy chair pre-consumption. It’s a lengthy and meaningful read.

British philosopher Roger Scruton catapults Samuel Butler’s 1872 novel, Erewhon, and Aldous Huxley’s Brave New World in a progressive argument about the moral perils of technology advancement. Further interpretation is beyond this forum (and my noggin); have a read and let me know what you think.

There’s one patch of prose that caught my eye: a thoughtful evaluation of The ‘I’ and the ‘We’. Here’s a snapshot:

There are two contrasting attitudes that we take toward practical questions, which we might call the "I" attitude and the "we" attitude. As a rational agent, I see the world as a theater of action, in which I and my goals take a central place. I act to increase my power, to acquire the means to realize my objectives, to bring others to my side, and to work with them to overcome obstacles. This "I" attitude is implanted deep in the psyche, since it defines the starting point of all practical reasoning and contains an indelible intimation of the thing that distinguishes people from the rest of nature--namely, their freedom. There is a sense in which animals, too, are free: they make choices, do things both freely and under constraint. But animals are not accountable for what they do. They are not called upon to justify their conduct, nor are they persuaded or dissuaded by dialogue with others. This strange feature of the human condition has puzzled philosophers since Aristotle; and it is the foundation of all that is most important to us. All those goals that make human life into a thing of intrinsic value--justice, community, love--have their origin in the mutual accountability of persons, who respond to each other "I" to "I."
Entrepreneurs and creators are individuals (with a capital, bold-faced, 96-point “I”), propelled by self interests and societal pulls to create. The practice of creation – and the execution and sharing of what’s created – happens in a “we” sense. Entrepreneurs create products and deliver services that manifest value to others. Without such value exchange – e.g., participation of the “we” – the creation has no value; the “I” operates in a silo.

Scruton continues:
Behind all my projects, however, like a horizon against which they are projected, is another and quite different attitude. I am aware that I belong to a kind, and that kind has a place in nature. I am also aware that we are part of a world to which we are adapted. Whereas the "I" attitude seeks change and improvement, overcoming the challenges presented by nature, the "we" attitude seeks stasis and accommodation, confirming that we and our world are at one. Things that threaten the equilibrium between human beings and our environment, either by destroying that environment or by undermining human nature, awaken in us a profound sense of unease, even of sacrilege. The "we" attitude tells us that we must never disturb the two fixed points of our universe, the environment and human nature. This attitude may be the residue of prehistorical events, an unconscious memory of the original harmony between "our hunting fathers" and their natural home, from which our species departed on its journey into knowledge. But it continues to exert its influence on our practical reasoning, filling our minds with ideas of a prelapsarian innocence.
Entrepreneurs face an obvious challenge: The dissonance between adapting to the world and making a positive contribution (change). Adaptation, the utilization of existing resources, and the fulfillment of inadequately met needs are tenets of entrepreneurship. Scruton adds:
It will be objected that human nature does not stand still. The "I"' attitude restlessly pursues the path of invention, and in doing so radically changes the focus and the goal of human conduct.
Entrepreneurs are anything but still, and we can hope that a greater good (a societal and economic moral compass?) weeds out those operating in we-disrupting ways.

Tuesday, May 29, 2007

Thinking in four dimensions

Caught the tail of an interesting interview on NPR this morning. Singer and songwriter Dion described the four dimensions of thought (past, present, future and imagination) he employed in composing a song. Compelling stuff.

Creative thinkers, as we’ve amplified in previous discussions, possess similar combinatorial traits. Geniuses appear to do it effortlessly, flowing in an unconscious realm with great visibility of the past and present. This combination – a rich reservoir of then and now knowledge and experiences, and an ability to combine such elements and imagineer the future – is the root of creative thinking.

As psychologist Sarnoff Mednick explained:

The creative thinking process … (is) the forming of associative elements into new combinations which either meet specified requirements or are in some way useful. The greater the number of associations that an individual has to the requisite elements of a problem, the greater the probability of his reaching a creative solution.
In his tome How Breakthroughs Happen, Andy Hargadon shares an apt (and timely, given the 40-year anniversary of Sgt. Pepper's) story. David Crosby described what the Beatles brought to rock and roll as a recombination of what had come before:
I heard folk sort of [chord] changes with rock and roll sort of beat [in the Beatles music]. Now, most new musical forms are created that way, the synthesis takes place by two disparate streams of stuff hitherto unrelated being mushed together.
Crosby’s “disparate streams” work well with the four-dimensional thought process. Arthur Koestler asserted the moment of creative insight occurs when an individual recognizes that an element embedded in one frame of reference belongs also to another frame of reference, its double membership thus revealing a relationship that can solve a problem (or, for today’s conversation, make music). This act of insight Koestler calls a "bisociative act."

While bisociative acts are complicated and quite rare, perhaps we can coin a new term: quadsociative, the ability to think, combine and create on four planes of thought.

Saturday, May 26, 2007

Dreamy venture

I had a dream. It was an engaging, childlike (yes, and …) discourse with some friends. Though my sleep was sketchy and my memory is foggy, here’s a replay:

Let’s form a company.
Yeah, but, it’s too hard, too complicated, too risky, and too costly. What the hell would we do?
That’s easy … we would have a Slurpee machine in the break room, a basketball hoop in the office, and Friday afternoon, rooftop keggers.
Seriously, paint a picture.
I thought we prohibited yeah, but thinking, oh serious one.
Okay, you get your Slurpees, hoop and socials. What else?
Well, for starters, no investment would be required.
Yes, and our products will solve big needs: I’ve gotta have it, our customers will drool.
Yes, and our customers will pay in advance, in cash.
Yes, and it will be like razors or printers: After the first purchase, they’ll be locked in to buying consumables.
Yes, and we’ll have established and effective distributors; no need to create or cultivate channels. Our distributors will be so cool that they’ll do the work for free.
Yeah, but I thought there were no free lunches.
With our company there will be. Sushi daily.
Yes, and there will be no technical or trendy obsolescence; our product will live into perpetuity.
Yes, and we’ll have full proprietary rights (patents and trademarks and trade secrets, oh my!).
Yes, and there will be great exit potential.
Yes, and we’d operate in an environment sans government regulations.
Yes, and we’ll never have to worry about paying taxes – the Feds will love us.
Yes, and there will be no risk; we’re guaranteed success.
Yes, and our markets will be recognizable, measurable, growing. The sky’s the limit!
Yes, and speaking of sky, we’ll have 100-percent gross margins … it will be like selling air!
Yes, and there will be no competition … it will be easy to create a new market and monopolistically prohibit new entrants.
Yeah, but doesn’t that mean we will not have a market since there’s no competition and therefore no customers?
Let him roll; everything’s set.
One major yeah, but: What will we do?
Play hoop, slurp Slurpees, entertain friends on the roof top, and count cash.
Yeah, but I’ve yet to meet an entrepreneur who has put cash and flow together in the same sentence.
Rest in peace.

Thursday, May 24, 2007

Creatoon

The brilliant James Goodchap checked in today with a lampoon of creative naysayers:



We've all been there, on both sides of the table. The toon reminds me of the normalized, left-brain, creative-stunting, "yeah, but" thinking we explored in Yes, and ...

Beware of wet blankets.

P.S. - Looking for a good read? Whether you're a fan of comics or not, pick up Scott McCloud's Understanding Comics. Beyond exploring the creative medium, it's loaded with useful tips on using visual metaphors and pictorials. If you use PowerPoint (and thereby combine pictures and words into hopefully harmonious messages), McCloud's quick read is a worthy perusal.

Paul's Burger Shack

My friend Paul is buying a hamburger stand. I think it's cool and plan to be the first in line, though I’m a bit worried since he’s a post-doc at UC Davis studying materials science or molecular biology or biomedical engineering (I can’t keep track). Should foster interesting burgers and other culinary concoctions.

Paul’s business is fairly algorithmic. Burgers, shakes, fries and cokes. The inner workings of running the business – sausage making, as my friend Michael calls it – are a bit laborious but also rudimentary. Paul’s Burger Shack will be in the business of delivering a pleasurable, tasty, efficient, consistent and economical dining experience to customers.

Other businesses are not that simple. Take the railroad industry. In the mid-20th century, the industry almost perished with the advent of passenger automobiles and interstate highways, and airlines. Generalizing, rail companies believed they were in the rail business. In reality, they were/are in the transportation biz, delivering people and freight from here to there. Customers were ambivalent regarding the “how”; they cared about what (does it cost) and when (convenience and travel time).

There are myriad examples of staid industries that failed to understand their business. If you run a power-tool company, you’re in the business of selling tools, right? The late Harvard prof Theodore Levitt sagely disagreed: “People do not want to buy a quarter-inch drill. They want a quarter-inch hole.” It’s the result, the experience, the end that consumers desire, not the means (or the “how”).

The Great Guy Kawasaki shares an apt tale in his commencement address to Palo Alto High School:

Let me tell you a short story about ice. In the late 1800s there was a thriving ice industry in the Northeast. Companies would cut blocks of ice from frozen lakes and ponds and sell them around the world. The largest single shipment was 200 tons that was shipped to India. 100 tons got there un-melted, but this was enough to make a profit.

These ice harvesters, however, were put out of business by companies that invented mechanical ice makers. It was no longer necessary to cut and ship ice because companies could make it in any city during any season.

These ice makers, however, were put out of business by refrigerator companies. If it was convenient to make ice at a manufacturing plant, imagine how much better it was to make ice and create cold storage in everyone’s home.

You would think that the ice harvesters would see the advantages of ice making and adopt this technology. However, all they could think about was the known: better saws, better storage, better transportation.

Then you would think that the ice makers would see the advantages of refrigerators and adopt this technology. The truth is that the ice harvesters couldn’t embrace the unknown and jump their curve to the next curve.
What is the sake of your business? Why do customers purchase your products and services (i.e., what do they seek to accomplish or fulfill)? The better you understand their needs (the what and why, or the value they seek and you deliver) the better equipped you’ll be to successfully develop products and services (the means, including attributes and features) that deliver a desirable end result.

A final anecdote, which we’ve referenced previously: Starbucks is in the experience business, not the coffee biz. Andy Hargadon amplifies Howard Schultz’s concerns about Starbucks’ straying focus in a terrifically insightful post.

(Final anecdote II: Great piece in Barrons a few months ago about Starbucks, their model, challenges, growth strategy, and economics. Quick sip: An average Starbucks generates $1mm/year in revenue. Quick math: That’s $3k/day; 750 or so customers at $4 a pop. Quick logic: With these numbers, the on-every-corner infestation starts to make sense.)

Wednesday, May 23, 2007

Vuja de

I dug up an insightful, albeit dated (it’s from late 2005 … wonder if there’s a blogland prohibition against belatedly referencing posts) piece in Fast Company, Anthropologists in Pursuit of ‘Vuja De’. Here’s the opening graph:

Everybody has heard of deja vu, right? It's the distinct feeling you've been here before. When you go out to do field work in Anthropologist mode, you should aspire to the opposite: a state of mind my friend Bob Sutton at Stanford calls "vuja de." Vuja de happens when you enter a situation you've been in a thousand times before, but with the sense of being there for the first time.
Very clever, apparently the genius of comedian George Carlin. It's synonymous with the French saying, jamais vu, which, when wikied, means "never seen" and is used to describe any familiar situation which is not recognized by the observer.

Vuja de is also synchronous with several previous discussions herein, including Yes, and … (specifically our reference to Zen Beginner’s Mind) and Problem solver, or problem finder.

The terse post also reminded me of Why Not?, the second-best-innovation-and-creativity-book-in-the-world (behind Hargadon’s How Breakthroughs Happen). Chapter 1, The Way Things Never Were, commences with a quote from Robert F. Kennedy (after George Bernard Shaw):
Some men see things as they are and say, “Why?” I dream of things that never were and say, “Why not?”
Tom Kelley, the Vuja De post’s author, concludes:
Once you start asking the right vuja de questions, you might find that the answers can lead to big opportunities for your business.
Agreed, and it recalls one of my heroes, Curious George (more on George soon). Curious is one cool monkey. He has a wonderful penchant for getting in trouble because he’s so, well, curious. If George could talk – can/does he? – I’m sure his dialect would be full of fearless vuja de questions.

Caps and gowns

Caps and gowns and ignoramus string-pulled champagne poppers, oh my.

It’s graduation season and commencement addresses are in the air. I’ve delivered a few, including one paying tribute to Dr. Seuss, echoing his wonderfully apt Oh the Places You’ll Go. Seuss begins:

Congratulations. Today is your day. You’re off to great places. You’re off and away.
You have brains in your head. You have feet in your shoes. You can steer yourself any direction you choose.

In my talk I employed a top-five list (be honest, seek challenges, be lucky, have fun, and change the world). Aside from Seuss’s brilliance, a few cool tenets – it has been four years since oration – surfaced:
  • Be honest (Mark Twain): "If you tell the truth, you don't have to remember anything."
  • Seek challenges (Sufi teacher): A great idea will come to you three times. If you go with it the first time, it will do nearly all the work for you. Even if you don’t move until the second time, it will still do half the work for you. But if you leave it until the third time, you will have to do all the work yourself.
  • Have fun: We’ve all heard the trite phrase: Those with the most toys win. I challenge you to change the T in toy to a J and you’ll be closer.
My favorite commencement addresses? Guy Kawasaki’s Palo Alto High School delivery, and the it-can’t-be-real (it’s not) Kurt Vonnegut MIT speech. (BTW, click here if you’d like to see a Stanford grad’s take on four sterling addresses.)

First, a few Kawasaki excerpts (read the entire address … it’s superb):
  • Delay, as long as possible, the inevitable entry into the workplace and a lifetime of servitude to bozos who know less than you do, but who make more money. Also, you shouldn’t deprive your parents of the pleasure of supporting you.
  • One of the biggest mistakes you can make in life is to accept the known and resist the unknown. You should, in fact, do exactly the opposite: challenge the known and embrace the unknown.
  • Play to win, and win to play: In its purest form, winning becomes a means, not an end, to improve yourself and your competition. Winning is also a means to play again. The unexamined life may not be worth living, but the unlived life is not worth examining. The rewards of winning—money, power, satisfaction, and self-confidence—should not be squandered.
Fictitious Vonnegut (another must read):
  • 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.
  • Do one thing every day that scares you.
  • Accept certain inalienable truths: Prices will rise. Politicians will philander. You, too, will get old. And when you do, you'll fantasize that when you were young, prices were reasonable, politicians were noble, and children respected their elders.
  • Be careful whose advice you buy, but be patient with those who supply it. Advice is a form of nostalgia. Dispensing it is a way of fishing the past from the disposal, wiping it off, painting over the ugly parts and recycling it for more than it's worth.
Los graduados de las felicitaciones, son hoy su día. Enjoy.

Tuesday, May 22, 2007

One dollar, one hour

I caught myself humming the other day …

I’ve gotta dollar in my pocket and an hour to spend,
A tear in my beer and a relationship on the mend.
Thus concludes my country and western career, spanning all of a dozen seconds.

The latter part of my melodic malaise is irrelevant; the first verse warrants attention. Why?

Back in my incubator days, I talked a lot. To anyone, anywhere … show me a podium, fire up the projector, and off I went. One such occasion was a presentation to an MBA entrepreneurship course, taught by one of my old profs, Dr. Dorf. After skipping to and fro through incubator land with new economy/bschool vernacular in full gear (muttering far too many “tions,” including ideation, innovation, creation, diversification, risk mitigation, resource allocation, portfolio optimization) and showcasing our 150-step process to hatch ideas into ventures with wings, Q&A commenced. Good questions, if memory serves.

And then, a zinger from Dr. Dorf: Chris, if any of these ideas (we had six or so portfolio companies at the time) are so good, wouldn’t it be wise – given the high risk and your minimal resources – to invest all your time, energy and money in one company?

Makes sense now that I paraphrase his question; stymied, my reply was full of “tions” and reasons why our shotgun incubator approach would work.

Dr. Dorf was a sage then, and he’s even more wise now. Since incubators are an extreme case study, let’s focus on a single nascent venture.

Young companies and entrepreneurs lack – but require – focus. They complicate simple things, try to be everything to everyone, target too many markets (or take a horizontal approach), opportunistically develop multiple products prior to launching their first, and tackle what’s easy and reactive (versus proactively doing what’s important and oftentimes uncomfortable [e.g., sales, fundraising]). Established organizations have layers of lard at their disposal – they can survive sans focus. But, as Emerson expressed, concentration is the secret to strength.
I’ve gotta dollar in my pocket and an hour to spend.
I often pose (fortunately, do not sing!) this question to young companies. If you have one dollar to invest or one hour to spend, what should you do (not what do you want to do or what do you like to do)? Their answers are typically correct, but their actions do not follow suit. Great entrepreneurs and great companies concentrate chaos – the alchemy of startup company activity – into focused results. When they do, it’s musical.

What would Socrates buy?

Yesterday's Motley Fool featured a cool post, What Would Socrates Buy?, evangelizing the great thinker and hypothecating his investment portfolio. A quick excerpt:

Around 400 B.C., he would plant himself on a street corner in Athens, pose to passers-by a difficult question like "What is courage?" and then challenge anyone to provide an accurate answer.

If someone claimed that courage is the capacity to endure, Socrates might counter: "But what about obstinacy? An obstinate person has an incredible capacity to endure, but does that person have courage?" Socrates could invariably raise objections that would cause the other person to retract or at least qualify his or her answer.

There were no cut-and-dried answers to Socrates' questions. The point was to demonstrate that most people "think" they know things but haven't really thought them through carefully enough. He wanted to illustrate that everything must be open to question, and that the process of questioning, during which we would continuously refine our answers, is the path to discovering a form of the truth.
Reminds me of two recent posts: Problem solver, or problem finder? and, sarcastically, Water cooler chat with the geniuses.

Enough navel gazing; back to the Fool. What would the moral master look for?
I propose that Socrates would probably look for companies that provide products or services that are truly useful to society. He would seek out growth, as evidence of constant questioning and finding better ways to do things.
And, the author posits that Socrates' portfolio would include Apple. Smart guy.

Navel gazing

My wife and I used to play a game, typically orchestrated to kill time and foster conversation during nighttime runs through East Sacramento. It went like this: If you were stuck on an island with one (fill in the blank), what would it be? One CD (this was 10-plus years ago, pre-iPod), one band’s music library, one book, one type of food, one drink, one periodical, one TV show, one flavor of ice cream, etcetera. Great fun.

Our “stuck with one” game germinated a new question: If you were stuck on an island with a laptop (a Mac, of course) and could access only one Web site (think: dumb terminal), which would you choose? Google is an obvious one, but – based on my strict rules of engagement – you’re prohibited from leaving the site. Scratch it. Wikipedia would rock, but may be a bit boring. YouTube? Solid candidate. iTunes too, presuming you had a credit card/an ability to buy anything you wanted to view or hear.

A more pragmatic question: If your company ceased to exist (e.g., if you were deported to an incommunicable island), what would the world lose? Who would be deprived? How would your beneficiaries fill their then unmet needs?

Answers to these no duh! questions are at the root of effective business strategy: candid knowledge of your customers and complementors, the differential value you deliver, and the competitive alternatives available. Who really cares about my business, and why? It’s a sobering and revealing navel-gazing exercise.

Unfortunately, most companies fail to (are scared to?) effectively take a look. Perhaps we should invent a navelgazescope.

Cui bono?

I dusted off my copy of Co-opetition this weekend. Though it was a too-many-years-in-the-making reunion, skimming the pages was like settling into a cozy, neglected chair: It felt familiar but remorseful, the latter because of my deprivation.

Co-opetition is a must-read business strategy book. It embraces business as a game, systematically diving into a no-nonsense, pragmatic and useful analysis of value. It synthesizes game theory into a clear and usable framework, anecdotally levered by a collection of cool case studies.

Three Co-opetition memories remain since my first read a decade ago:

  • The introduction of complementors, one of the game’s four players. A player is your complementor if customers value your product more when they have the other player’s product than when they have your product alone.
  • An awkward at-the-urinal-during-a-class-break conversation with my professor where he turned to his right and opined, “Chris, Chapter 4, the ValueNet. It’s really good.” (The ValueNet is a cool tool to map the game’s players [customers, complementors, competitors and suppliers].)
  • Cui bono?
Cui bono? It is a Latin adage, coined by Cicero and employed by Co-opetition’s authors, Brandenburger and Nalebuff, to query, “Who stands to gain?”, "To whose benefit?", or more literally, "(being) good to whom?"

To me, it is a fundamental question for all businesses, particularly when combined with two follow-on questions: How? And, Why?

First, identify all players who stand to gain from your business: customers, suppliers, distributors, service providers, employees, shareholders, manufacturers, etc. Second, clearly state how each player stands to gain (i.e., what is the relationship – the exchange of value – between your company and the constituent). Third, encapsulate why each player seeks to do business with you.

Basic analytical blocking and tackling, eh? Here’s where it gets fun: As your understanding of your playing field (your game) crystallizes, you can maximize the value exchanged with each player, identify additional beneficiaries (players who stand to gain from playing the game), and cross-fertilize relationships between disparate players.

If the purpose of the corporation is to make money through the creation and delivery of value, playing the cui bono? game is a terrific catalytic tool.

Thursday, May 17, 2007

Pitching your grandmother

I attended the UC Davis Graduate School of Management’s Big Bang! business plan bake-off last night. The event has matured considerably over the past seven years; 150-plus people enjoyed presentations by five nascent (and impressive) companies questing for $15k in prize money. In years past, two Venture Lab (my former incubator’s) portfolio companies cashed in; one company invested its couple-of-thousand dollars of winnings into a bizdev trip back east. Instead of Eureka! or I’m going to Disneyland!, it was, We’re going to Buffalo! Cool beans.

The BigBang! presentations reminded me of a wonderful lesson I learned in graduate school. Professor Tsai commenced our stats course with a pledge: I’m going to teach you statistics so you can explain it to your grandmother. The presentations reminded me too of an undergrad English professor who, I’m convinced, went to bed each night spooning a copy of Strunk and White’s 85-page tome, The Elements of Style. Said prof embedded the book's rules in our impressionable noggins. His favorite: Rule 17. Omit needless words.

Vigorous writing is concise. A sentence should contain no unnecessary words, a paragraph no unnecessary sentences, for the same reason that a drawing should have no unnecessary lines and a machine no unnecessary parts. This requires not that the writer make all his sentences short, or that he avoid all detail and treat his subjects only in outline, but that every word tell.
Where am I going with this? Let’s return to last night’s presentations. Each of the companies has germinated from, or is inspired by, a UCD technology. Brain-freezing stuff for us mortals; attempted comprehension creates a residue similar to slurping too much of a Slurpee. (BTW, I’ve been trying to salvage a used Slurpee machine for the past decade … please email me if you have one laying around.)

If there’s a constructive ounce of critique – a word -- for the presenters (across the board, and this relates to most every company pitch I’ve absorbed), it’s simplify. Four more: Ensure every word tells. Six more: Describe your company to your grandmother.

It’s common for people to complicate simple things; it’s uncommon (and most challenging) to simplify complicated things. Especially when you’re pitching a PowerPoint to 150 people. Particularly when you’ve sired the idea: you know it, you love it, you own it … everyone else should get it, right?

Orate what you do in one simple, understandable-by-all sentence. Employ an analogy (one a layperson will understand). Better yet, impersonate a six-year-old’s show-and-tell (sharing, in today’s grammar school vernacular) classroom presentation and share a tangible prototype (no matter how raw). Or, role-play the experience a customer will enjoy. Keep it simple and make it memorable.

Your grandmother will be proud, and you may even raise a few bucks.

+++++++++

Post script (8/2/07): Just discovered a relevant and worthy commentary from Garage Technology Ventures' Bill Reichert. Quick summary: The purpose of your pitch is to sell, not to teach. Your job is to excite, not to educate.

Play

In previous posts we’ve explored the creativity of children (and the correlation to business), along with the art of entrepreneurship (playing). We’ve yet to address why it is uncool to “play” in business. If play generates clear personal (euphoria, satisfaction, self-contribution) and organizational (creative stimulation and innovation) benefits, what gives with the white-shirt, buttoned-up, I’m-curing-cancer business class?

Walt Disney got it, as encapsulated in Michael Michalko’s terrific book, Cracking Creativity: The Secrets of Creative Genius:

One of Walt Disney's greatest secrets was hit ability to draw out the inner child in his business associates and combine it with their business acumen. Because he made the work playlike, his associates worked and played together with a missionary zeal. Disney was a true genius who needed to collaborate with other people to express his concepts. Disney got the creative collaboration he needed by consciously creating a humorous and playful environment.
Do the rigid norms and rules of business temper our ability to “draw out the inner child”? Implications of Play for a Theory of Fantasy provides an interesting perspective:
Play becomes progressively more socialized during birth to puberty. Its symbolism after about the fourth year hews ever more closely to reality, play eventually becomes less "imaginative," and the individual forms of play give way to participation in games with rules.
Freud, as we engaged last week, believed much creative behavior, especially in the arts, is a substitute for and continuation of the play of childhood. He asserted the opposite of play is not what is serious but what is real. If something must exist or be established to be “real,” how are new creations created? As Aristotle posited, “It is impossible that anything should be produced if there were nothing existing before.”

Okay, I’m confused. Let’s dig deeper into the relationship between children’s play and creativity. Here’s another take from Michalko:
When we play, we become childlike and begin to behave in spontaneous creative ways. Play and creativity have much in common. In particular, play often involves using objects and actions in new or unusual ways, similar to the imaginative combinations of ideas involved in creative thinking. Picasso once remarked that he became a true artist when he learned how to paint like a child. Einstein has been described as the perennial child and was very much aware of the parallels between creative-thinking thought patterns and those of playful children. Einstein suggested to Piaget that he investigate the way children think of speed and time, thereby inspiring one of the psychologist's most illuminating lines of research.
A common belief is that the four-letter W word (work) tends to be a convergent activity, focusing on the task at hand, while play is a divergent activity -- it opens out and is not easy to contain. Business leaders frown upon unpredictable, difficult to contain/understand/manage variables. And, it’s taboo to toy and tinker with ideas for the heck of it. The Art and Science of Creativity provides a little illumination:
The relation of creativity to childhood play is clearest, perhaps, in the creative person's delight in playing with ideas for their own sake, in his habit of exploring ideas and situations for the sheer joy of seeing where they will lead. As Getzels and Jackson point out: This delight in imaginative functioning -- even in seemingly profitless situations -- strikes us as reminiscent of the young child's joy in exploring the world and testing his intellectual powers in make-believe and in acting "as if".
“As if” … reminds me of our “Yes, and …” post. Again, the virtue – some would say necessity – of playing make-believe emerges. The dynamic principle of fantasy is play, which belongs also to the child and appears to be inconsistent with the principle of serious work, Michalko asserts. He continues:
Psychologist Carl Jung noted that without this playing with fantasy, no creative work has ever yet come to birth. It is no coincidence that geniuses take a childlike delight in painting, or composing, or searching for a grand theory of the universe. Creative geniuses tend to return to the conceptual world of childhood and are able to wed the most advanced understandings of a field with the sensibilities of a wonder-filled child.
This is getting good. More soon, but first it’s time for recess.

Wednesday, May 16, 2007

Yours is a very bad restaurant

For the past few days a bird (a robin?) has been trying to enter our house. He/she stubbornly drums our dining room window – thump, thump, thump – with no sign of letting up. With time it will tire, fall to the ground or realize the window is a window.

Listening to and watching my confused feathered friend was a mirror-gazing experience. The other night I had a few beers with friends at a local establishment, which will maintain its anonymity. Every town has a similar place: a central, convenient, somewhat hip, and seemingly appetizing restaurant and/or bar. Status quo at the unnamed joint is an irritable combination of apathetic and rude service, high prices and bland eats, enveloped in a fog of pomposity (as if we, the patrons, are doing the restaurant a favor). The place stinks.

After emptying my wallet and mistreating my palette, I wasted a few minutes of my wife’s time, lambasting the establishment. This is your sixth of seventh time there … if it’s so bad, why do you continue to go? she asked. Because it’s central, convenient, kinda hip, and I keep hoping it will get better, I weakly replied, only now realizing that my actions are analogous to the aforementioned bird. Well, why don’t you complain to the manager?

Which reminded me of a cool story (with thanks to The Great Tim Sanders for sharing this with me), an hysterical episode that amplifies the value of customer service, the power of an individual voice, and the wonderfully viral nature of the Internet.

Here’s a synopsis:

Two IT consultants tried to check in to a room at the Doubletree Hotel in Houston. Though they had pre-booked and paid for their room, they were denied accommodations. And – here’s where it gets good – there were treated like cockroaches by Night Clerk Mike. Rather than ferreting away their frustrations (read: my behavior), they did what any good, well-paid consultant would do: They created a PowerPoint presentation, entitled Yours is a Very Bad Hotel, lamenting the poor service and lampooning Night Clerk Mike. After sending it to a handful of friends (along with the hotel), word spread. Quickly. An estimated – how do they estimate this stuff? – one-million plus copies of the PowerPoint exchanged hands. Ouch.

Alas, the bird outside our dining room has outsmarted me and given up. Hopefully I’ve learned a thing or two.

Tuesday, May 15, 2007

Build a bonfire

We went camping this past weekend in Gualala. Perfect weather, extraordinary setting – the kind that makes you ignorantly question why anyone would want to live outside Northern California – and terrific company. And, of course, a camp fire, much to the delight of our boys. “Daddy, add a match … we need more sticks … it’s going out … when do we get to roast the marshmallows?” After two successful, smore-filled nights and one painfully grabbed hot rock (an unfortunate lesson for my seven-year-old), bonfire thoughts were rekindled.

What is a bonfire? Well, there are bonfires, and then there are bonfires. The obvious:

\Bon"fire`\, n. A large fire built in the open air, as an expression of public joy and exultation, or for amusement.

The less obvious: Bonfire is a terrific, catalytic metaphor for businesses, particularly nascent ventures. The visual (a fire that expands with obvious incremental effort), social (an ever-growing – as the bonfire expands – flock of people drawn to the fire), and sensual (the intensity, warmth and power of fire) cues are relevant and useful. Here’s how it works:

Who participates: Your customers, suppliers, analysts, complementors, etc. -- anyone who cares (or should care) about your company.

Where does it occur: The marketplace of your industry, specifically in the minds of your participants.

The bonfire effect: With each endorsement (sale, partnership, testimonial, news article), the bonfire grows. So too does the collection of perceptions, awareness, and connectivity of your participants. As more people participate in the bonfire, the brighter you shine and the more likely people are to see you (a bonfire that’s happening) and get involved.

Caution: Bonfires can die; you must always add wood (create activity in meaningful and valuable ways) to keep it going.

Contemporary analogs and complements include viral marketing, peer-to-peer networks, and the network effect. My latest company, Crescendo, has built – and continues to stoke – a vibrant bonfire.

Keep it burning.

+++++++
Post-script (27 Feb 08): Great metaphor from Silicon Valley angel investor Mike Maples r.e. investing in early-stage companies: Angel investors use a single match (that is a small investment) to light a forest fire (get a big return). Cool.

Kegger


I’m going to a kegger Saturday night.

There. I said it. Seven words that I erroneously believed were extinguished from my vocabulary. Surprisingly (nostalgically? chemically?), I’m looking forward to it.

Keggers are the big brother of lemon aide stands. Like all kids, I operated the latter a few times. And, like most all kids, I failed to make a dime. With a pit stop chucking newspapers, throwing a kegger was my first true entrepreneurial activity. (And, now that I think about it, the most illicit and illegal for-profit thing I’ve done.)

My friend Dave, who’s out from Philadelphia visiting his family, is going to join me, though he’s yet to admit it. We’re going to navigate the mean streets of Davis on bike to minimize bodily damage. Dave and I enjoyed and threw a few hundred too many keggers in the '80s. As proprietors, we’d pencil together a flyer (this was eons before cell phones or myspace or instant messaging), select a remote location (typically a flock of trees in a distant field; the perfect, one-road-in location for police to trap you), hustle a keg or two from a friend with a fake ID, and sell cups. Three bucks a pop.

What can an entrepreneur learn from a kegger? For starters, keggers are:

  • Viral: Word spreads quickly and economically (read: free).
  • Scrappy: Materials (paper and pens for flyers; plastic cups; a few bags of ice; a tap; and, a keg) are readily available and cheap, and the launch (throwing the party) is simple.
  • Fertile: Keggers have sired many derivatives (complementary products and services): beer bongs, the games of quarters and chandeliers, keg stands, beer pong, slosh ball.
  • Social: People affably convene and interaction is fostered around a central product (the keg).
  • Memorable: Successful entrepreneurs are good storytellers. Keggers = stories = memories.
  • Enterprising: There are 165 12-ounce beers in a 15.5-gallon keg. Do the math.

My seven-year-old just peeked at my PowerBook. Dad, what’s a kegger? It’s, um, well, um, a party for mommies and daddies. Can I go?

No, and you’re not allowed to throw a kegger, unless you’re exercising your entrepreneurial creativity.

Monday, May 14, 2007

Just do it

I would wager that for every 10 somewhat-incubated (how’s that for an ambiguous test?) ideas, maybe one – on a good day when the planets align – makes it out of the gin mill. Let’s posit that three or four are just that: an idea. Another handful – say three – are either nice-to-have, undifferentiated prospects and/or slightly tweaked replications of a current innovation. One or two are simply not feasible: You can’t make it, the market will not buy it, etc.

That leaves one lonely idea. One prospective product (or company) that yearns to germinate. How?

Aside from the obvious take-and-idea-and-turn-it-into-something-people-will-buy blocking and tackling of business, I’d bank on one discriminating facet: commitment.

Table the ideas for a minute. For every 10 wannabe entrepreneurs, nine never percolate. Their risk-to-opportunity ratio is too high. After all, it’s human nature to resist failure. Think Psych 1A and the Commitment Theory, tersely summarized by Dr. Timothy J. Maggs:

One of the most admired qualities in our society today is that of true commitment. The ability to singularly focus on one objective and to move forward with an undying passion towards accomplishing a specific goal, whether it be a job, a marriage, an athletic event or even a favor for someone else requires strong character and discipline.
Once you commit – publicly, emotionally, financially and professionally – you’ve anted up. You’re in the game and you have a chance. Even then, you’re idea/company will probably not make it. But, you have not failed. Whether skiing downhill, driving a car, or running a business, it's much easier to change directions when you're moving. If you're not moving you're, well, going nowhere.

“The only people who fail are those who never try,” opined Ilka Chase. Well said, though I prefer a Kawasakism (one of Guy Kawasaki, a former Sacramento Entrepreneurship Academy Showcase speaker’s, nine truths of innovation): Don’t Worry, Be Crappy.
An innovator doesn't worry about shipping an innovative product with elements of crappiness if it's truly innovative. The first permutation of a innovation is seldom perfect--Macintosh, for example, didn't have software (thanks to me), a hard disk (it wouldn't matter with no software anyway), slots, and color. If a company waits--for example, the engineers convince management to add more features--until everything is perfect, it will never ship, and the market will pass it by.

Nothing entrepreneurial is perfect. Nor easy. If it were easy (to commit, to create, to prosper), everyone would do it. After all, the rewards are too tantalizing to resist.

++++++
Post-script (8/15/07): Unearthed a worthy post, Too Many Companies??. An excerpt:
The key to getting on the bike is to stop thinking about "there are a bunch of reasons i might fall off" and just hop on and peddle the damned thing. You can pick up a map, a tire pump, and better footwear along the way.
++++++
Post-script (17 Mar 08): Paul Graham of Y Combinator tenors our tune in a post, How Not to Die ...
One of the most interesting things we've discovered from working on Y Combinator is that founders are more motivated by the fear of looking bad than by the hope of getting millions of dollars. So if you want to get millions of dollars, put yourself in a position where failure will be public and humiliating.

The dream team

I met with a young company last week. Cool technology, interesting market, sound first-customer prospects, solid IP protection, and a few breadcrumbs of angel funding. After the standard dog-and-pony presentation, we dug in to the cart and horse (or horse and jockey). Metaphorically, cart and horse struck a cord as we elucidated our dream team of Greek and Roman gods; it was a Wikipediant moment. Here’s a fly-on-the-wall replay of our discourse:

Okay, for starters do we agree we want a strong leader?

Yep. It’s gotta be Hercules. Or, Heracles. I get them mixed up … let’s stick with the former; he’s easier to remember.

Yes, and we need brains with the brawn. How about Athena, the goddess of wisdom? She's a smart cookie.

Good thinking. Minerva’s solid too, and she was an Olympian. With wisdom, we need insight and intuition. I say Apollo.

Not bad, but how about Janus, he of the two heads, the ability to see both ways, the deity of beginnings and endings? Imagine our unfair competitive advantage!

Cool, we’re getting there. Morpheus may be a good fit, as we must never cease dreaming.

Yeah, but with dreams we need good fortune. I vote for Fortuna, with a side of Victoria. It’s all about winning, eh?

Yes, and there’s something jaw dropping about a new ventures. Let’s pick up Trivia, the goddess of magic. We can use some.

Alright, alright, enough crystal ball mysticism. Who’s going to sell?

That’s easy. It’s a two-headed team: Suadela, she of persuasion, and Hermes, the god of travelers.

I like it, but wasn’t Hermes also the deity of thieves, liars and politicians, let alone the transporter of souls to the Underworld?

Bingo. Such inside knowledge and powers will help us avoid charlatans and cheats, and our E&O policy is rock-solid. Heremes and Suadela can move mountains and quotas.

We need to inject a little frivolity and cheer into this company. Anyone game for a drink?

Patience, young man, hold your thirst. Once we close our first sale, we’ll rejoice. And, we will need Dionysus, the god of wine and sensual pleasures.

I like the taste and feel of it. Now, for a company name. Any ideas?

That’s easy. Let’s name it after our team! How ‘bout HerculesAthenaMinervaApolloJanusMorpheusFortunaVictoriaTriviaSuadelaHermesDionysus?

I bet the dot-com’s available. Think we can trademark it?

Messing with Mark Cuban

Mark Cuban bashing is tired. Not that he’s not an easy target, and nor does he need a defender (though the Mavs may): Cuban is successful, cavalier, tireless, nontraditional and outspoken. And, his team just chowdered a first-round series to an eighth seed. Ouch.

To all the stone chuckers, I have a different take: Cuban is all of the above, with a healthy dose of genuine character, charismatic wit, and insatiable curiosity. And, he’s a damn cool entrepreneur.

A few years ago I engaged Mark to speak to a group of likewise “cool” entrepreneurs, the Sacramento Entrepreneurship Academy. Parked at my favorite coffee shop at pre-dawn on a Sunday, I blindly blasted an email extolling the benevolence of the Academy and offering an invitation to speak at our annual Showcase event. I did not expect a reply. We had been dissed by the Kings owners (the Maloofs), and as president of the nonprofit, I was charged with finding a speaker. I was flailing.

I hit “send” at 6:56. Two minutes later, my in-box chirped with a reply from Mark (paraphrased): “I’m in, two conditions: First, no speech … I would like to do a Q&A with the students; second, I need to be at Arco (Arena) by game time.”

After rereading the email three or four times, I replied (it’s now 7:02 or so), confirmed his participation and ensured his desires would be met. And – stretching my luck and his good will – I invited him to a pre-event lunch with the students and our board. He accepted.

Over lunch, Mark could not have been more engaging. He persistently, but cordially, grilled the students about their business plans. He traded hoops small talk with the crowd. And, he delivered a 15-minute-or-so extemporaneous talk about entrepreneurship. Invaluable morsels for our emerging entrepreneurs.

(Two quick plugs: The Academy raised a few thousand dollars for Cuban’s Fallen Patriot Fund. Whether you’re pro-war or anti-war [I’m in the latter camp], it’s a terrific cause. And, we lunched at The Firehouse, hands down the best restaurant in Sacramento.)

In between breaths and bites, I asked: Why do you do this (continue to create companies)?

He paused, peeked at the ceiling, and replied: I like to “mess” with people.

So do I, I injected; how so?

I like to find situations where industries are staid or behind in their thinking, he explained. I can then immerse myself in the industry, learn as much as possible, create a company and seek to change the rules of the game.

The cynic may rebut: Yeah, it’s a helluva lot easier when you have a billion bucks in the bank. True, but not relevant: His fascination was the game of entrepreneurship, his advantage was his ability to identify opportunities and market inequities (a problem finder first, problem solver second), and his route-to-market was knowledge absorption and critical execution. Money helps, but it does not culture creativity or foster hard work.

Mark Cuban has plenty to do. He did not have to spend four mid-week hours with an unknown group of entrepreneurs. But he did, and he’ll continue to creatively “mess” with people and industries (check out HDNet and 2929 Entertainment for two examples) as the rock tossing continues.

++++++++
Post-script (29 Feb 08): Great post from Cuban, The Best Equity is Sweat Equity (read it; it's worthy). He wraps:

The reality is that for most businesses, they don't need more cash, they need more brains.

Friday, May 11, 2007

Problem solver, or problem finder?

At its core, business is simply the application and management of resources to solve problems in the creation and delivery of value, and subsequent production of wealth. We are conditioned – cognitively and managerially – to solve problems. Most managers would prefer binary decision-making versus ambiguity and uncertainty. Keep it simple. Don’t question authority. Solve the problem – there’s got to be an answer! – and move on.

Creativity and innovation are different. “A question well put is half resolved,” contends Paul Souriau. “True invention thus consists in posing questions. There is something mechanical, as it were, in the art of finding solutions. The truly original mind is that which finds problems.”

Voltaire concurred: Judge a man by his questions rather than his answers.

Einstein and Infeld: The formulation of a problem is often more essential than its solution … To raise new questions, new possibilities, to regard old questions from a new angle, requires creative imagination and marks real advance in science.

Evans and Deehan: Creative people do not only solve problems. They also find problems to be solved.

Getzels and Csikszentmihalyi: The central question: "How are new problems discovered?" rather than the more usual question, "How are existing problems solved?" The first step in creative activity involves the discovery, or formulation, or the problem itself.

I have often quoted Peter Drucker’s wonderfully terse definition of marketing: Define a need and fill it. In other (my) words, find/identify/seek a problem (or an unmet/inadequately met need), and then pursue a solution.

But, if we are conditioned to mechanically solve problems (think: IQ testing), how do we seek problems? A.F. Osborn contends creativity is activated when we bombard the imagination with queries, stabs such as, “what if…” “what about…” “what else…” And, I would add, “Yes, and …”

Imagineer a problem, frame a riddle, or construct a puzzle. Then, solve it.

Thursday, May 10, 2007

Preparing to fish

I’m as guilty as anyone at regurgitating clichés. “Failure to prepare is preparing to fail” is one (though I do not necessarily agree). Pasteur’s assertion – chance favors the prepared mind – is better and certainly not a cliché.

Which brings me to a story. A virtue of graduate school was the quantity and quality of speakers, particularly the intimacy of interaction and discourse. One Saturday our marketing strategy class was entertained by a music industry executive, the then-CEO of a $1 billion (or so) company. A role model for me and my fellow wannabe capitalists.

At the conclusion of the normal song and dance, the class asked questions. Bread and butter stuff about corporate strategy, financial metrics and modeling, channels, collaborative alliances, employment opportunities, etc.

Then, a somewhat shy classmate raised her hand: “Mr. Music, what do you think about marketing plans and strategic planning?” Good, relevant question; the product of the class was a strategic marketing plan for a real-life company.

The executive’s eyes swelled and shoulders peaked as he disengaged from his desk-side perch.

“You wanna know what I think about plans? Hmmph! The minute the ink’s dry, they’re worthless. All they are is a form of marketing masturbation.”

I caught a glimpse of our professor. He had, of course, invited the executive to speak. He had not, of course, expected this reply. And, the executive’s tail feathers perked, confidence sky-high, propelled by the giggles and smiles of his MBA flock. The class loved it; a new b-school term – marketing masturbation – was conceived.

The take-home? Metaphorically, business is like fishing: you can learn how to fish, you can figure out where to fish, and you can assemble the best fisherman and poles and lures. All of which are antes (how to fish: skills and core competencies; where to fish: market segmentation; fisherman: people; poles: marketing and sales tactics; lures: well-positioned and appetizing products), but none of which matter if you fail to fish. Or fish in the wrong pond. Or use the wrong poles or lures. Or fish with the wrong people.

Another cliché: In a perfect world, it’s “ready, aim, fire.” There are no unknown unknowns; you have the information you need to make a decision. In the real world – whatever and wherever that is -- you often (successfully) fire with a fuzzy aim, prior to being prepared.

Go fish.

Markets are conversations

In 1999 The Cluetrain Manifesto was published, replete with 95 theses. The first thesis: Markets are conversations. Here’s a peek:

These markets are conversations. Their members communicate in language that is natural, open, honest, direct, funny and often shocking. Whether explaining or complaining, joking or serious, the human voice is unmistakably genuine. It can't be faked.

Seems pretty logical, eh? If you’re running a company or a marketing organization, of course you want to converse in a candid, genuine voice. You seek to communicate with (not broadcast to or speak at) an identifiable, visible, self-referencing, homogeneous constituency. Basic marcom blocking and tackling, right?

Unfortunately – or, fortunately if you’re one of the few who get it – most organizations are apathetic and sedentary in their marketing. Though they won’t admit it, they do business in a dark room, aspiring to captivate constituents with a hopeful wink. It’s like a junior-high dance: boys on one side of the gym, girls on the other. It did not work then, and it doesn’t work now (unless you get lucky or employ a blind shotgun approach).

Cluetrain continues:

… most companies ignore their ability to deliver genuine knowledge, opting instead to crank out sterile happytalk that insults the intelligence of markets literally too smart to buy it.

Sterile happytalk. I like it. Consider Permission Marketing author Seth Godin’s take:

Marketing is a contest for people's attention. Thirty years ago, people gave you their attention if you simply asked for it. You'd interrupt their TV program, and they'd listen to what you had to say. You'd put a billboard on the highway, and they'd look at it. That's not true anymore. This year, the average consumer will see or hear 1 million marketing messages - that's almost 3,000 per day. No human being can pay attention to 3,000 messages every day.

Cluetrain’s “sterile happytalk” is analogous to what Godin calls “interruption marketing”.

Interruption marketing is giving way to a new model that I call permission marketing. The challenge for companies is to persuade consumers to raise their hands - to volunteer their attention. You tell consumers a little something about your company and its products, they tell you a little something about themselves, you tell them a little more, they tell you a little more - and over time, you create a mutually beneficial learning relationship. Permission marketing is marketing without interruptions.

Seems logical, eh? If you run a business, of course you know who you’re communicating with. And, no duh!, you know what’s important to them. And they must care about you, your company and your products. And you would never talk to or speak at a customer; everything is first-person conversational. Right?

Here’s a quick test: Grab one of your company’s brochures or print the sales/marketing copy posted on your web site. Set a meeting with one of your more intimate (better) customers. And, open the meeting by reading the literature – verbatim -- to them.

Does it feel authentic? How do they react? Are the messages conversational and meaningful to the customer?

The authenticity of your marketing communication is important. So too is the genuineness, the intimacy, and the relevance of the experience you deliver. Take a peek at Andy Hargadon’s elaboration of a recent internal memo from Howard Shultz, Starbucks’ chairman. Good stuff.

And, keep the conversation going.

Water cooler chat with the geniuses

A few immortals stopped by the shop the other day. Morbidly honored, I listened in.

“Okay, let’s begin with a few ground rules,” Socrates commenced. “We must all ask provocative questions and encourage natural ways of learning, as it is not enough to call for the reproduction of what has been learned.”

“I agree,” Aristotle chimed in, “but it is impossible that anything should be produced if there were nothing existing before.”

“Good point, dear friend,” replied Socrates. “Thinking is a skill that is developed through practice and it is important to ask questions that require the learner to do something with what he learns -- to evaluate it, produce new ideas from it, and recombine it in new ways.”

“But, you can't solve a problem with the same thinking that created the problem,” opined Einstein.

“Aye, aye, Einy, and I would add that the resources with which the artist begins are both necessary and sufficient to account for all that is found in the created product,” Aristotle deduced.

“I have a problem with your “found” assertion,” interjected Picasso. “I seek, I do not find.”

“Yes, but when you do find, you must remember that anyone can make something complicated,” Einstein added. “It takes genius to make it simple.”

“So, if something must exist prior to being produced, and if you need new thinking to solve problems, and if the resources are all here, what’s the simple answer to the complicated problem?” asked Socrates.

Puzzled, Aristotle grabbed my PowerBook and Googled “simple answer to the complicated problem”. Before the screen could refresh, Picasso seized the titanium beauty and dropped it to the ground. “Computers are useless,” he said. “They can only give you answers.”

My visitors filed away, leaving me to ponder the eyebrow-raising conversation in the cloud of my shattered Mac. Takeaways?

  • Creative people ask lots of questions; they are curious.
  • Creators do not accept the normal, established, status quo; they seek.
  • Nothing is truly new. Creators toy and tinker. They simplify. They look beyond the obvious answer to the root of the problem. They combine what exists and what is known in new and useful ways.

Entrepreneurship: The art of business

My dad, Charlie Soderquist, passed away in 2004. It is trite and hollow to say he lived a full life. But, he did. He was the best damn entrepreneur I’ve met, and he dedicated much of his “second” life (his last two decades after taking his company public) to supporting his alma matter, UC Davis, and advocating the little guy, entrepreneurs. (He also penned two books, one out-of-print muse about the confluence of art, science and entrepreneurship [The Waring Blender], and another [Sturgeon Tales] detailing the life of Sally Sturgeon and her journeys through the Sacramento River.)

One of my dad’s benevolent causes was the Sacramento Entrepreneurship Academy, a one-of-a-kind nonprofit that has mentored, educated and trained more than 500 college-student entrepreneurs. In 1996 my dad delivered the organization’s commencement address, shared verbatim below. And, I had the honor of sharing the same address with a new class after dad's passing.

Here goes ...

SEA Commencement Speech, 7 May 96
Charlie Soderquist
1240 words

Welcome grads, board, parents, friends.

Dr. Mae Jemmison, the first black female crew member of the space shuttle, gave a talk at UCD last January. She said that the problem with speeches is the following: you have to say something, but you can’t say too much. That’s my dilemma: how do I say something clever in 10 minutes after spending nine months with this class.

Dr. Jemmison illustrated her point with a story of an old lady named Mrs. Brown, whose husband had died. Mrs. Brown took a three-page, single-spaced obituary to the editor of the local newspaper.

“It’s too long,” said the editor, “for I must charge you five-cents per word and you can’t afford it.”

Mrs. Brown grabbed back the pages and wrote across the top of the first page: “Mister Brown died.”

“I’m sorry, Mrs. Brown,” said the editor, “but that’s too short, we have a seven-word minimum.”

Mrs. Brown again grabbed the papers and added, with finality, at the top: “Red Ford for sale.”

My “seven words” are about the words we use to try to understand this very odd word: entrepreneurship. Each of us – graduates, board members, parents – has a different collection of definitions. I believe that I can stand before you and say with great confidence that I personally hold the Guiness Book of World Records-record for definitions of entrepreneurship. However, whatever the collection of adjectives and adverbs we use, they seem always to apply only to three nouns.

First, the person.
We say things like: Did they display integrity? Work hard? Were they compassionate? Creative?

Second, the result.
We ask: Was it important? Did it create jobs? General good? Something beautiful? Wealth?

Finally, the process.
We comment: was it artful? Was it skillful? Was something else destroyed? Was it risky?

Creative. Wealthy. Risky. These are the adjectives and adverbs. The colors of paint on the painting. Just the colors of paint on the painting. But what is the painting about? What is the essence of painting?

The painting is not about the person, the actual artist. As we know, Van Gogh did a self-portrait. But only one, amongst hundreds of pieces of art. And it’s also quite true that writers write autobiographies. Once. Not even writers are so presumptuous to write a second or third autobiography. The subject – the person – just isn’t that interesting past one read, and multiple biographies would expose the charade of truth telling: that the truth changes.

So I assert that the essence of the painting in question is not the person. As people, we are already too many other things. We are golfers and we are bicycle riders and we are parents and we are lovers.

The painting is also not about the result, for the result is always arbitrary. Only trivial things have exact endings, final results. Try and think of an example of something that truly ends. The lawn is mowed; no, the lawn is never mowed, the lawn starts growing as soon as the mower blades have whacked it. In the case of our painting, the painter just … stops … at the end of a brushstroke. Perhaps because of fading light, the call to dinner, boredom. But the artist could pick up the brush again, and add or subtract. Writers are the worst at this. I can go back to a short story in my computer, add one word, and create a new result. I can make ten different results in one hour. So there is no real end, never a final result to art. One day, the painter just stops.

If the essence is not the person and the essence is not the result, it must be something else. You are a golfer. Is the purpose of golf to complete the final putt on the 18th hole? No. You are a bike rider. Do you ride a bike to get somewhere? Maybe, sometimes, but only when you use a bike, not ride a bike. Have you ever been bike-riding? You are a parent. Try and describe what the result or the end or the completion of that would be. Your death? Theirs?

The essence of important things, like painting and writing, golfing and bicycle riding, cooking and loving … and entrepreneuring … is the process. The process is the only important thing. There is no other choice. To focus on yourself or on the end result is a mistake. There IS NO END. And you already ARE YOU.

Sports are always great metaphors for business lectures. Coaches and team and goals. But look down to the individual level. Basketball. Michael Jordan, Dennis Rodman, Mitch Richmond. In the art of basketballing, is the result to win the game? Sort of, but which game? What about the next game tomorrow, a hundredth game three years from now? Is the essence of basketball to Dennis Rodman the person Dennis Rodman? We may witness the person of Dennis Rodman in an interview before the game, or endorsing some consumer product after the game, or, most likely, being thrown out of the game. Is that basketball? No.

The essence of basketball is the playing of basketball – ask Jordan or Rodman or Richmond. Here’s another reason why sports analogies word. The word playing. What a perfect word for the process. Playing.

Dear graduates, please play.

As a final note, it is my hope that you do not become butchers, bakers or candlestick makers. It is my wish that you not become an employee of a board member, though they will try to hire you because you are bright and hard working and schooled. Constant diligence is required on this point. Do not become their employee. If they persist, tell them you want to become their partner.

Instead of butchering and bakering and candlestick makering, I want you to do something that no one has ever done before. The Academy – its board, friends, alums, speakers – is not unanimous on this point. That’s OK. But it is my turn to talk, and I would remind us all that this is the graduation of the Sacramento ENTREPRENEURSHIP Academy.

This is not some technical training institute, not an MBA school, not a backside of the matchbook correspondence program. Sacramento and the whole world is already full of smart, young people who can work for someone. SEA didn’t spend hundreds of hours of its time and tens of thousands of its dollars to have you do something that people who were not members of the Academy can and are already willing to do! Maybe I should have told you this in September.

Andy Shapiro, a Santa Fe artist, said, and I quote: “Nobody makes anyone become an artist. You have to be driven. You’re not an artist because you paint – you’re an artist because you have ideas.”

I would add to Shapiro’s quote that you will only find both satisfaction and success if you play at the process. Who you are is irrelevant; you already are who you are. And the results are elusive; there is no end.

All of us here tonight are very, very proud to have been with you in this first year of your membership in the Academy. When you leave here tonight, I ask that you join a team of artists. I suggest that you and this team of artists play at the art of business. The art of business is entrepreneurship.

Thank you and congratulations.

Why we create

The world is a logical place. Through the application of left-brain common sense, it works. It’s on autopilot. It is, if you choose, a sedentary place. You can float through days or weeks or years reacting to the logical constructs of relationships and work and society.

But – like anything that’s easy or reactive in life – such a practice is, to quote my four-year-old son, soooo boring. Creativity is both a release from and expression to the logical land.

Mihaly Csikszentmihalyi touches on the importance and enjoyment of creativity in his tome Flow: The Psychology of Optimal Experience. (If you haven't read it, get it ... it's good.) He posits that the way to happiness “lies not in mindless hedonism, but in mindful change.” Daniel Pink contemporaneously builds on this premise in his book, A Whole New Mind. (IBID: Read it!) He asserts creativity is becoming increasingly important, a "conceptual age" where we need to foster and encourage right-directed thinking (e.g., creativity and emotion) over left-directed thinking (e.g., logical, analytical thought).

Right. Left. But, why do we create? Psychologist J.Z. Young opined:

The activities that go to the creation and enjoyment of works or art are … quintessentially those by which the brain, working every day as a creative agent, synthesizes input from the world to make a satisfactory life. This is why I say that for human societies the creative, aesthetic and artistic activities are among the most important things that we do ... The creations and satisfactions of art include and symbolize both our individual acts of perception and the expression to others of what we perceive.


Two generations ago, Ernest Schachtel offered an interesting perspective:

The main motivation at the root of creative experience is man's need to relate to the world around him, a need which, as we have seen, becomes particularly strong and striking when urgent physical needs such as for food and rest have been stilled. This need is apparent in the young child's interest in all the objects around him, in his ever renewed exploration of and play with them. It is equally apparent in the artist's lifelong effort to grasp and render something which he has envisaged in his encounter with the world, in the scientist's wonder about the nature of the object with which he is concerned, and in the interest in the objects around him of every person who has not succumbed to stagnation in a closed autocentric or sociocentric world. They all have in common the fact that they do not remain in a closed, familiar, labeled world but that they want to go beyond embeddedness in the familiar and in the routine, and to relate to another object, or to the same one more fully, or from another angle, anew, afresh.

Embeddedness in the familiar and in the routine. Sounds like a land of clones (or Windows PC users) pitter-pattering through life, applying logic, questioning little and stunting curious thought. But, as Wallace and Gruber opine in Creative People at Work, if there were no constraints, nothing would be crazy, and novelty might not be so difficult to produce.

Creativity matters because it’s euphoric. It’s challenging. It’s rewarding. It’s difficult to emulate. It's valuable (specifically when it becomes an innovation and gains market acceptance). And, when practiced – when we create – it is our personal stamp on society.

++++++
Post-script (8/20/07): Csikszentmihalyi's Flow is a rich and diverse work, spanning far beyond the above encapsulation. Today's Freakonomics includes a post about talent and "deliberate practice". Great stuff, and it reminds me of our David O'Meara/Bill Walsh prose of a few weeks ago.

++++++
Post-script (24 Feb 08): Terrific post from Eric Nehrlich engaging the value of repetition and memorization. Two morsels:
A friend’s 7-year-old son recently challenged me to a game of chess. I’ve never played chess seriously, and had not played a single game since before he was born. I quickly found myself in a struggle - I made a mistake early and he took my queen. I eventually fought back to a mostly equal position, and we agreed on a draw as we had to leave for the wedding we were both attending ... Chess is hard because of the combinatorial explosion of possibilities - each move creates new possibilities and analyzing them all consciously takes more brainpower than anybody except Deep Blue has. So how do chess experts play the game successfully? Another friend at the wedding had been a chess master when he was a teenager, and I asked him about his strategies. He claimed that when he was playing, he had memorized all possible openings through fifteen moves, so while the other player was expending conscious effort to analyze the opening series of moves, he was playing without thinking because he already knew the best move in each position. That left his conscious brain available to analyze the deeper strategy in the game and plan for the midgame, giving him a competitive advantage.

This sort of unconscious pattern recognition is present in all games. Whenever we first play a game, we’re trying to remember the rules, and struggle just to make legal moves. As we learn more about the game, we take advantage of our brain’s continuous projections described in On Intelligence - we compare the projected results of our moves with what actually happened, and store the results. Now the legal moves are automatic and require no thought, and we’re thinking tactically about sequences of moves. We can now embed that sort of tactical thinking into another layer of patterns on top of the “legal moves” neuron layer, e.g. learning to automatically set up the sequence of card play necessary for an endgame squeeze in bridge.

Yes, and ... (creative lessons from children)

I would like to share a somewhat fictional story from a recent backyard barbecue.

One of our kids offered a cool (to sedentary, Coors Light sipping adults in attendance: outrageous) suggestion: “Let’s climb the tree fort to find Martians.” (Adults: Martians do not exist, particularly in our backyard.) A playmate chimed in: “Yes, and when we get up there, let’s blast off to Mars.” (Tree forts don’t fly, and bed time’s at 8:00.) “Yes, and I’ll be the pilot, and you can be an astronaut.” (You’re too young to fly a space ship.) “Yes, and we’ll get there in, like, eight seconds.” (Mars is 93 million miles away.) “Yes, and when we land, we’ll build a campfire and make smores.” (Where are you going to find wood and matches, let alone marshmallows and chocolate and graham crackers? And, playing with fire is bad! Furthermore, even if Martians did exist, they probably do not like smores.) “Yes, and once we make the smores, we can light the extra marshmallows on fire and fly back to earth.” (Marshmallows cannot fuel a rocket ship, let alone a tree fort). “Yes, and then we’ll have the Martians spend the night in our back yard in the tree fort.” (It’s not safe to sleep in the back yard, you’ll fall out of the tree fort, and Martians do not exist!)

The kids played a free-form game: Yes, and … There were no rules, no preconceptions or norms, and no restrictions. Aside from the obvious cynicism lampooned above, the adults employed logical, normalized thinking: Yeah, but … It’s an exercise exhibited every day in every company. It reminds me of one of Guy Kawasaki's sage truths of innovation: Don't let the bozos grind you down.

What does this – a fictional sliver of the imagination of children – have to do with creativity and innovation? Lots.

Creative people are like kids: They question apparent facts by asking why, how and what. Plato believed – though I do not think it’s as binary as he posited -- experience takes away more than it adds … young people are nearer ideas than old people.

Though he couldn’t make the barbecue (hopefully he’s working on the can’t-get-here-soon-enough iPhone!), Steve Jobs has a less-than-Platonic take: “Creativity is just having enough dots to connect … connect experiences and synthesize new things. The reason people are creative is that they've had more experiences or have thought more about their experiences.”

In Freudian psychoanalysis, much creative behavior is a substitute for and continuation of the play of childhood. Maslow believed self-actualizing creativeness was in many respects like the creativeness of all happy and secure children. It was spontaneous, effortless, innocent, easy, a kind of freedom from stereotypes and cliches. And again it seemed to be made up largely of "innocent" freedom of perception, and "innocent," uninhibited spontaneity and expressiveness.

Maslow further offered that almost any child can perceive more freely, without a priori expectations about what ought to be there, what must be there, or what has always been there. And almost any child can compose a song or a poem or a dance or a painting or a play or a game on the spur of the moment, without planning or previous intent.

But what about the urge to know, the desire (and need) to gain knowledge and experience? Is it difficult to connect and combine (dots) pre-collection? Zenkei Blanche Hartman, a former abbess of the San Francisco Zen Center, shares a perspective about the Beginner’s Mind:

Children begin to lose that innocent quality after a while, and soon they want to be "the one who knows." We all want to be the one who knows. But if we decide we "know" something, we are not open to other possibilities anymore. And that's a shame. We lose something very vital in our life when it's more important to us to be "one who knows" than it is to be awake to what's happening. We get disappointed because we expect one thing, and it doesn't happen quite like that. Or we think something ought to be like this, and it turns out different. Instead of saying, "Oh, isn't that interesting," we say, "Yuck, not what I thought it would be." Pity. The very nature of beginner's mind is not knowing in a certain way, not being an expert. As Suzuki Roshi said in the prologue to Zen Mind Beginner's Mind, "In the beginner's mind there are many possibilities, in the expert's there are few." As an expert, you've already got it figured out, so you don't need to pay attention to what's happening.

It is cool to play and act like a child, to collect and imagineer “dots” (as Jobs put it) – the ante to creative thinking – and then synthesize and connect your dots in new and interesting and valuable ways. That’s creativity.

+++++++++++
Post-script (21 Feb 08): Quick, somewhat relevant take from Micth Ditkoff of Idea Champions:
True innovation is about allowing paradox to be our teacher and guide -- and to accept, at least for a little longer than usual, ambiguity, dissonance, and discomfort -- the age-old precursors to breakthrough.