Friday, February 29, 2008

POTW: Freaky math

I just wrote about how staid companies do math (proven, verifiable, secure, quantitative stuff) and entrepreneurs and innovative companies create (unproven, to-be-tested) algorithms. Math's easy; crafting a new equation is difficult.

Thanks to Freakonomics, for the moment I stand corrected. Here's a slice of a freaky leap-day post:

A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost?

A. $1.10
B. $0.10
C. $0.05
D. $1.00
E. $0.15

Ten cents, I calculated.

Wrong. I turned to my horizontal-on-the-couch eight-year-old son. Without looking up from the Kings game, he blinked: That's easy dad. The ball costs five cents.

Building castles

Few things in life are more enjoyable than watching kids build stuff. Children are wonderful, imaginative creators. They need few materials, little motivation, minimal (check that: no) direction, and not too much time. Whether it’s a tree fort, a sand castle, a spaceship, or a backyard game, they create. (Think about the beginner's mind, which we wrote about here.)

What’s cool about kids – aside from their terrific creativity and lack of predisposition to norms – is their absence of fear, disdain for perfection, robust resourcefulness, and expediency. Entrepreneurs and companies can learn lots from children.

Successful entrepreneurs and prosperous companies creatively collect and connect dots without succumbing to societal norms. They are courageous, less than perfect, resourceful, and swift in their execution. They create, rather than perfect; they conceive (untested) algorithms, rather than doing math. They build forts first, iterate and create castles later.

Marissa Mayer, Google's VP of search products and user experience, credits her company’s success (in part) to, “innovation, not instant perfection.” She shared (with Fast Company) nine principles of innovation Google employs. A taste:

There are two different types of programmers. Some like to code for months or even years, and hope they will have built the perfect product. That's castle building. Companies work this way, too. Apple is great at it. If you get it right and you've built just the perfect thing, you get this worldwide 'Wow!' The problem is, if you get it wrong, you get a thud, a thud in which you've spent, like, five years and 100 people on something the market doesn't want. Others prefer to have something working at the end of the day, something to refine and improve the next day. That's what we do: our 'launch early and often' strategy. The hardest part about indoctrinating people into our culture is when engineers show me a prototype and I'm like, 'Great, let's go!' They'll say, 'Oh, no, it's not ready. It's not up to Google standards. This doesn't look like a Google product yet.' They want to castle-build and do all these other features and make it all perfect.
Reminds me a bit of a story -- Preparing to fish -- we shared many moons ago, along with our Fail fast, fail better post. Mayer continues:
I tell them, 'The Googly thing is to launch it early on Google Labs and then iterate, learning what the market wants--and making it great.' The beauty of experimenting in this way is that you never get too far from what the market wants. The market pulls you back."
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Post-script (1 March 08): Quick contribution from Tom Peters r.e. entrepreneurial spirit:
Fred Karl, designer of the Viking range and owner of that company said, "I was a weird kid—I began designing towns when I was 12." We all know that "weird" can be good, if we don't judge others through our lens ... Being weird increases creativity if we allow it to flourish. Fred Karl, founder of Viking Range, let his weirdness flourish abundantly.

Monday, February 25, 2008

Crowds

I met with a young company a few weeks ago at a local coffee house. The company's name is catchy, a bit cavalier. What does [company name] mean? I asked. Well, it's this, and this, and this. Hmmm. To the embarrassment of the entrepreneurs, I turned to a few fellow caffeine heads: When you hear [company name], whadya think? Universally, they contradicted the company's perception.

Ask a similar sample of folks what they think of "crowds". Their response -- my perception -- would be negative. Who likes crowds?

As we explored here, here, here, here, and here, crowd-funding/sourcing/decision-making/ideation/company creation/most anything is hip. The common thread: Harnessing the opinion of many to collectively make an informed, cooperative, better-than-the-experts decision. It works and it's cool.

Josh Catone proffers a thorough overview of crowd-centric business models, Crowdsourcing: A Million Heads is Better than One. He evidences household examples (Google and Wikipedia, among others) -- and back-alley models (Cambrian House and CrowdSpirit). Catone's take:

Crowdsourcing can be looked at as an application of the wisdom of crowds concept, in which the knowledge and talents of a group of people is leveraged to create content and solve problems. The official definition from the term's originator, Jeff Howe, is "the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call."

Crowdsourcing can be broken down in to three categories:

1. creation (like Wikipedia);
2. prediction (like Yahoo! Buzz); and
3. organization (like Google).

A poignant example is PicksPal:
PicksPal is a sporting event prediction site that allows users to vote on amateur and professional sporting events. The site is set up like a game, allowing you to spend points to try and beat the odds makers - you win or lose points depending on the accuracy of your picks and how ambitious you are. PicksPal awards weekly prizes, like sports tickets and flat screen televisions, to the top performing players. PicksPal says they have over 100,000 users ...

PicksPal sells "genius" picks, based on the picks of their top performing members, to people betting actual money. So far the site is doing pretty well. As I write this, they have a 52% win rate against the spread for their last 25 picks, and they report a 63% win rate overall.

Catone asks: Can crowdsourcing be successful at creating products, predicting markets, or organizing data? He suggests four rules to help fuse success in tapping the wisdom of crowds:
  1. Crowds should operate within constraints.
  2. Not everything can be democratic.
  3. Crowds must retain their individuality.
  4. Crowds are better at vetting content than creating it.
To me the efficacy of crowd-based decisions and business models is based on the obvious (the wisdom of many) and the less obvious (the obscurity of participants). Individuals acting individually in a collective endeavor mitigate their phobia and distaste of crowds and maximize the returns of the collaborative. It's a contemporary cooperative with the reach of millions.

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Post-script (28 Feb 08): Interesting, relevant and timely Springwise post reviewing Kluster, a crowdsourcing platform. Quick take:
By offering a set of sophisticated project management tools, Kluster aims to enable crowds to develop new concepts. The system is currently being demonstrated at the TED conference in Monterey, where the event's attendees will be able to work together to create a product prototype in 72 hours. (Rapid prototyping machines and a team of modellers are standing by.) Kluster wasn’t developed just for tangible objects though. It can also be used to create brand identities, plan events or for any other project that would benefit from crowd input.
I love it, particularly their engage-and-reward participants model. Members can earn ‘Watts’ (the local currency) by helping solve problems (bringing new things to light?) or suggesting refinements or enhancements. They can also invest their Watts, and can cash out if a project is purchased by a third party. Investments grow along with a project’s value, and a member’s stake is based on how much he or she has contributed. Springwise wraps:
At the very least, using Kluster will let them interact with their most dedicated customers. Smaller companies, meanwhile, can use Kluster as an instant research and development lab, enlisting (and rewarding!) the community to help ‘flesh out’ ideas that they might otherwise not be able to develop.

Sunday, February 24, 2008

The Giving Tree

One of my favorite organizations, the Sacramento Entrepreneurship Academy, was founded based on a simple premise: Entrepreneurs replicate themselves. Over the past two-plus decades, the Academy’s Board (30 or so regional business folk who pay $1,200 a year to volunteer their time to train, educate and inspire [and replicate!] the next generation of entrepreneurs) has mentored 500 students. Board members give – of their time, money, expertise, and energy – and get (the gratitude of replication).

One of my favorite books, and a contemporary fave of my five-year-old son, is Shel Silverstein’s The Giving Tree. It’s a melodic gem; the message is paradoxical, at times inspiring and uplifting (the generous gifts of the tree), at times sad and perplexing (the emotion of the tree – “and then the tree was happy … but not really” – after the boy chops the trunk to create a boat).

Benevolent entrepreneurs are similar when they replicate, and you can draw parallels to Silverstein's genius. Here's the analogy I posed in an earlier post, comparing gardens and gardening to companies and entrepreneurship:

All gardens begin with site selection: A gardener selects an area and commences preparation. The gardener will then plant seeds. Seeds are fueled by water (not too much, not too little), sunlight (the more, the better) and artificial and organic pesticides. As we explored last week, our pollen-transporting friends, bees, play a role too. Given a week or two of nurturing, the seeds sprout and plants emerge. Given many more weeks of nurturing and fuel, the plants grow, blossom, produce vegetables, and collectively dispel inconvenient truths. Visitors visit the garden, chat with the gardener, and (perhaps) enjoy its products. As the garden grows, more gardeners and more fuel are needed; the simple joy of seeds, soil and water evaporates. And, gardeners oftentimes create and cultivate new gardens with new plants in different sites. Great gardeners love what they do. They sweat. They get their hands dirty. They are protective, even defensive, of their garden. They – with help from mother nature – make something out of nothing. Eventually, gardens (or the plants therein) die. Generally, they are replaced or replenished. Most gardeners enjoy the fruit of their labor (fresh fruits and veggies and flowers), and some even make money at it.

All companies begin with selecting and preparing an idea. The entrepreneur (gardener) then tests and incubates his ideas (seeds), fueled by seed capital, refrigerators full of Mountain Dew and Coors Light, and colleagues (team members, advisors, family). Given time, the company will sprout an embryonic (V1) product. Given more time and nurturing and fuel, the company matures, blossoming and producing worthy products (and perhaps propelling inconvenient truths). Visitors visit the company, meet with the entrepreneur and his fellow gardeners, and (perhaps) purchase products or add fuel (capital) to the company. As the company grows, more team members and more capital are needed; the simple joy of ideas, inspiration, and all-nighters evaporates. And, entrepreneurs oftentimes create and cultivate new companies with new products. Great entrepreneurs love what they do. They sweat. They get their hands dirty. They are protective, even defensive, of their company. They – with help from others – make something out of nothing. Eventually, companies (or their products) die. Generally, they are replaced or replenished. Most entrepreneurs enjoy the fruit of their labor (independence, pride, gratification, recognition), and some even make money at it.
Seed and fertilize. Tend and care. Nurture and grow. Harvest and profit. Give and take. Reinvent and replicate. Sounds like a fruitful path to prosperity.

Friday, February 22, 2008

The network is the innovation

Building a better mousetrap is not a precursor of success. So shared my friend Andy Hargadon yesterday in a talk to the UCD Graduate School of Management’s Business Partners. Andy facilitated a sage, humorous, pragmatic, eye-opening talk about the myths and realities of innovation. It was terrific.

While the mousetrap is an ante, the key to fruitful (profitable!) innovation is creating a network that will make the mousetrap successful. Take Edison: He did not invent the electric light bulb. Rather, he developed the first successful network that brought light into homes. The idea/invention was part of the solution; success came from creating and cultivating a network to produce and deliver the outcome (light) consumers desired.

Henry Ford, as Andy relayed, is another cardinal example. Ford did not develop the first automobile, nor the first assembly line. He perfected the automobile assembly line – read: made new connections -- an adaptation of previous efforts and borrowing from automation in meat (meat=cars?) packing plans. Ford’s take on his role:

I invented nothing new. I simply assembled into a car the discoveries of other men behind whom were centuries of work...Had I worked fifty or ten or even five years before, I would have failed. So it is with every new thing. Progress happens when all the factors that make for it are ready, and then it is inevitable. To teach that a comparatively few men are responsible for the greatest forward steps of mankind is the worst sort of nonsense.
Back to Andy’s premise. Innovation, he asserts, is about connecting, not inventing; great leaps happen as networks converge (not when someone sires an idea). He proffered a five-step process (“NetStorming”) for companies and entrepreneurs to employ:
1. Identify your solution.
2. For 15 minutes, identify as many types of network partners as you can (e.g., customers, suppliers, regulators, etc.).
3. For 15 minutes, identify specific people or companies as potential network partners.
4. Find connections between the needs and resources of those different partners.
5. Identify how your solution can enable these connections.
In short, the efficacy of an innovation is based on its (the company’s) ability to connect and enable. Bravo. It reminds me of a passage from Harold Evans’ They Made America, amplifying the value of combinatorial creations, personal connections, and enabled networks:
Connections between innovators are ubiquitous -- one good innovation deserves another. LEO BAEKELAND corresponded with EDISON, the WRIGHT BROTHERS, FORD, WILLIS WHITNEY of General Electric, the DUPONTS and BELL. That the engineering potential of Bakelite might be greater than the chemical was ELMER SPERRY’S contribution. SAMUEL COLT was friends with SAMUEL MORSE. GIANNINI’S Bank of America took a risk by investing in WALT DISNEY’S early movies, including Fantasia in 1940. Disney hired the young BILL HEWLETT and DAVID PACKARD to build some of its first electronic equipment for Fantasia. THOMAS WATSON SR. was probably the first passenger in a car with an electric self-starter built by his friend CHARLES KETTERING, who needed Leo Baekeland’s new plastic for insulation. HENRY FORD used Bakelite for his fenders. Ford’s assembly lines were inspired by the beef and pork disassembly lines in the Chicago factories of the meatpacking innovators ARMOUR and SWIFT. ARNOLD BECKMAN backed WILLIAM SHOCKLEY who hired ROBERT NOYCE and GORDON MOORE whose circuits were used by NOLAN BUSHNELL, the founder of Atari, who hired STEVE JOBS, and TED HUFF, creator of the chip that made personal computers possible, worked for Intel, which called in GARY KILDALL, the most important innovator in computer operating systems, who was betrayed by IBM.

Thursday, February 21, 2008

Junto

It's not often that I participate in a meeting that goes as planned. People are people: focus wanes, discussions deviate, off-topic subjects prevail. While meeting objectives are typically nailed, the route to results is roundabout. I enjoyed such a meeting today, one that reminded me of Ben Franklin and his Junto club (also known as the Leather Apron Club).

As I praised in a previous post, Poor Richard was an entertainingly eclectic, curious, witty and enterprising spirit. He was the inventor and proprietor of much, and an acclaimed author and business strategist. Franklin lavished philosophical exchange; his cerebral vehicle was the Junto (Latin for meeting) club, which he formed when he was 21.

From his autobiography:

I should have mentioned before, that, in the autumn of the preceding year, [1727] I had form'd most of my ingenious acquaintance into a club of mutual improvement, which we called the Junto; we met on Friday evenings. The rules that I drew up required that every member, in his turn, should produce one or more queries on any point of Morals, Politics, or Natural Philosophy, to be discuss'd by the company; and once in three months produce and read an essay of his own writing, on any subject he pleased.

Our debates were to be under the direction of a president, and to be conducted in the sincere spirit of inquiry after truth, without fondness for dispute or desire of victory; and to prevent warmth, all expressions of positiveness in opinions, or direct contradiction, were after some time made contraband, and prohibited under small pecuniary penalties.

Franklin's curiosity drove the Junto's Friday evening meetings in Philadelphia. He devised a series of questions engaging a range of intellectual, personal, business, and community topics. These questions were used as a springboard for inclusive discussion and community action.

I've spent a lot of time herein trumpeting the value of asking questions. A selection of Franklin's Junto inquiries (remember he was a ripe 21 at the time) resonate:

  1. Have you met with any thing in the author you last read, remarkable, or suitable to be communicated to the Junto? particularly in history, morality, poetry, physics, travels, mechanic arts, or other parts of knowledge?
  2. What new story have you lately heard agreeable for telling in conversation?
  3. Hath any citizen in your knowledge failed in his business lately, and what have you heard of the cause?
  4. Have you lately heard how any present rich man, here or elsewhere, got his estate?
  5. Do you know of any fellow citizen, who has lately done a worthy action, deserving praise and imitation? or who has committed an error proper for us to be warned against and avoid?
  6. Do you think of any thing at present, in which the Junto may be serviceable to mankind? to their country, to their friends, or to themselves?
  7. Do you know of any deserving young beginner lately set up, whom it lies in the power of the Junto any way to encourage?
Nearly three centuries ago, story-telling and question positing -- in an agenda-free, open-ended forum -- ruled. Long live juntos.

Monday, February 18, 2008

Tell me a story

There’s something wrong with situations, real or simulated, where dreaming is frowned upon. Alter egos and Eyeores pragmatically vault you back to reality. Get real. Seriously. C’mon. Yeah, but. Dreamer. Life kicks you around in normalized ways.

It takes a while for kids to be normalized. We (parents) play along with their fantasies, chortling and rolling our eyes in a some day he/she will learn fashion. Kids absorb – and love to tell – stories. As we shared in Yes, and … (creative lessons from children):

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.
I recently discovered an interesting and relevant @Google talk from economist Robert Frank where he amplified the narrative learning theory:
At its core, the narrative perspective holds that human beings have a universal predisposition to 'story' their experience, that is, to impose a narrative interpretation on information and experience.
Great experiences – dreams, fantasies, movies, fiction, entrepreneurial endeavors – are rooted in tales, stuff we remember. Stories are a vehicle to articulate and illustrate our aspirations, our newness, our creativity. Frank continues:
[children] ... turn things into stories, and when they try to make sense of their life they use the storied version of their experience as the basis for further reflection. If they don't catch something in a narrative structure, it doesn't get remembered very well, and it doesn't seem to be accessible for further kinds of mulling over.
Creators of all flavors – entrepreneurs, artists, authors, backyard-wandering children – live in a fantastical world, a place where people on the outside have trouble relating. Their perceived success hinges on their ability to craft and relay stories, to engage theretofore you-can’t-be-serious ferrets (or fat-headed VCs).

Think of two conversations. The first, and most common, is where you mundanely recount (and lament) facts with fellow-parent Fred during your kid’s baseball game. It’s a bobble-head drag about life's travails whereby you’re socialized to stutter forth. The second encounter is, say, with a new person, Melinda. Curiosity rules, attention heightens, a story is told, new circumstances pondered. It's a yes, and .... conversation. We forget Fred; we remember Melinda (and her story).

It’s trite to opine great things begin with a dream. Of course they do. The challenge is twofold: First, to dream, to think of things in new ways, to avert normalized thought; and, second, to craft and share a story, no matter how crazy or zany or wacky.

Creativity (collecting and connecting dots) breeds invention (new, combinatorial discoveries) that breeds innovation (commercial acceptance of an invention) based on the novelty and value of said innovation and – critically – your ability to relate to an audience. Well-told, relational stories get you there.

Treasure or trash?

You may have a comrade like my friend Dave who has a penchant for siring ideas. Lots. Dave’s ideas – products to develop, companies to create, businesses to buy – come in flurries. All are interesting Why not? or What if? musings, most are of the don’t waste your time variety, and a few are gems. In his perpetual ideation, how does/can Dave separate treasure from trash?

Dave’s latest treasure hunt is a cool case study. He is pondering buying a business, an interesting cash cow of an annuity. The business sells to a stick-beholden proposition: Regulations require customers to periodically and consistently do what Dave’s prospective company does. And, the service is not a core competence of the customers; for regulatory and practical reasons, customers outsource the service. Finally, it's a large, established, and growing market.

Dave engaged me and a mutual friend, who runs M&A for an enterprise software company, to lend a few brain cells to his evaluation. What questions should I ask, and how do I value the business? he queried. The latter’s boring (to me), an algorithmic process with a half-dozen or so methodologies to quantify value and audit historical financials; while it’s an ante, there are more important considerations. Two bread-and-butter thoughts:

  1. What is the need-to-have proposition (what and why do customers buy), and what are the economics? Herein I would probe to ensure it’s not a nice-to-have commodity.
  2. Why is the proprietor selling the business?
Tactically – if I was Dave – I would:
  1. Meet with a dozen or so current customers (and a half-dozen former clients) to evaluate the viability and efficacy of how, why, and how often they engage the company.
  2. Contact and meet with a half-dozen competitors, under the auspices of a desire to acquire their business (and, therefore, learn more about the competitive environment).
  3. Shadow the proprietor on a handful of sales calls.
  4. IBID, but go solo: Meet with a collection of prospective customers to evaluate the points in #1.
  5. Learn more about current regulations and regulatory forecasts, endeavoring to determine if the stick is made of mahogany or balsa.
If everything checks out quantitatively and qualitatively – it’s treasure, not trash -- two paramount questions remain: How does this opportunity compare to other opportunities (to either start or buy a business)? And, most importantly, an introspective navel gaze: Do I want to do this, and do I believe it will excite me? There are too many brain-dead, block-and-tackle ways to make money; discovering and pursuing something where you can profit financially and personally is the true treasure.

Alltop

One of my favorite features of a good blog is their blog roll, or list of blogs I read. It's a virtual card catalog of similar subjects and thinkers. Marc Andreessen's is excellent (several dozen categorized sites), Freakonomics too. Such compilations appetizingly fill my thirst for at-the-ready, interesting information.

If markets are conversations, can conversations -- aggregated -- make a market? Poof. Guy Kawasaki's latest endeavor, Alltop, may brilliantly bake the cake:

We help you explore your passions by collecting stories from “all the top” sites on the web. We’ve grouped these collections—”aggregations”—into individual Alltop sites based on topics such as celebrity gossip, fashion, gaming, sports, politics, automobiles, and Macintosh. At each Alltop site, we display the latest five stories from thirty or more sites on a single page—we call this “single-page aggregation.”

You can think of an Alltop site as a “dashboard” or “table of contents” for your favorite topic. To be clear, Alltop sites are starting points—they are not destinations per se. The bottom line is that we are trying to enhance your online reading by both displaying stories from the sites that you’re already visiting and unveiling stories from sites that you didn’t know existed.

Bob Sutton introduced me to Alltop ... his take:
Alltop is a clean, spare, and remarkably user-friendly compilation of top stories in 12 different categories, from autos, to egos, to mac, to sports, to politics, and a lot more. After spending about 30 minutes clicking around, I found it much more efficient and fun than looking for news on Google or Yahoo or any other place that I know. Just click, for example, on the Green Alltop section, and in seconds, you can see what happening everyplace from Treehugger, to The Green Skeptic, to the The New York Times [and Ecoworld!]. I am no expert on interface design, but there is some user experience magic here. It kind of felt like I was speed-reading the web.
Alltop's genesis:

This is the true story of Alltop. If you hear anything else from us, it’s because we retroactively changed the story for marketing purposes. We are the creators of Truemors, a site that is “NPR (or CBC) for your eyes” in the sense that it contains unusual breaking news, stories, and rumors like what you’d hear on NPR. A bit after the site’s launch, our friend Thomas Marban included Truemors in his single-page aggregation of news and tech sites called popurls.

We noticed that popurls sends Truemors as much traffic as Google. Clearly, he was onto something: Aggregate and display a bunch of sites for people, and they will come. This got us thinking about other topics that (a) have a large readership and (b) hasn’t been aggregated in an elegant and efficient manner, and we came up with idea of a doing a popurls of celebrity gossip sites. Then one thing led to another: Why not other topics like gaming, sports, politics, Macintosh, fashion, etc.?

The egos, green and small business sections are most fruitful -- several dozen of the best blogs' latest takes. Dig in for a bite ... it's quite tasty. And, rumor has it that The Art of Business will soon reside in the small business cafeteria, alongside Fast Company, Kawasaki, Fortune and the NYT.

Friday, February 15, 2008

For immediate release

I had a meeting last week with a collection of new business partners. Great guys (and firms). As our conversation evolved, we shifted gears to the marketing of our collaboration: Positioning, messaging, talking points, media outreach, etc. Basic blocking and tackling.

In practice organizations too often fumble -- tactically and strategically -- as they block and tackle their way through marketing. A myopic (company-specific) cause is typically an apathetic and erroneous focus on features and benefits. Companies like to sell drills; customers (who care and count and have $) want to buy holes. Great companies focus on the outcomes customers seek (the job they’re seeking to accomplish), versus trumpeting the whats and hows of their offering. It’s sad and all too common to see a company push attributes and pricing into a market.

Great marketing is conversational, a crescendo of meaningful interactions focused on fulfilling a “need to have” proposition. Conversations begin with an understanding of customer needs (outcomes), polished through positioning and illuminated through the company’s brand (the collection of perceptions in the minds of their constituents). If you’re good, you can craft and control the conversation and how constituents perceive your company.

Back to our meeting. As we bandied about the how, what and why of our collaboration, one of our partners tendered a thought: Why not create a mock press release announcing our relationship? Since we’re apt to create a real release, it’s a sage starting point, an opportunity to ensure we’re on the same page, singing the same song, commencing a series of meaningful conversations about the differential nature of our collaboration. I volunteered to take a first whack, harkening to bygone days as a journalist.

The mock release idea is brilliant, and its application is vast. Any time you do something meaningful – start a company, launch a product, hire a key employee, form a collaborative alliance, forge a new direction – craft a press release. In the process you can imagineer testimonials (from insiders and outsiders), refine your positioning, master your messaging, and orchestrate your song. It will be out of tune initially; that’s okay. The objective is to practice and polish before you preach. When you step to the public podium, the choir will harmoniously orate your message.

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Post-script (26 Feb 08): The Great Josh Morgan just shot me a relevant, read-my-mind post about the intrinsic value of press releases ... a taste:

... the most helpful part of the press release that still hasn’t changed for me is the process of creating it. Having a release as a concrete document you are creating helps focus internal audiences on what they really want to say and who they want to say it to. This is incredibly important for startups.

Wednesday, February 13, 2008

POTW: The Pitch Coach

We have invested a good chunk of real estate herein (here, here and here are a few posts) exploring the virtues of telling stories and delivering clear, concise and meaningful pitches. In short: Most all entrepreneurs are smart. Most all are passionate. Most all are chaperoning good (or great) ideas. But, most all fall down when it's time to communicate.

Our POTW comes from Presentation Zen (the blog; I've skimmed, but have not fully inhaled, the book). Therein Garr Reynolds introduces David Rose, chairman of the New York Angels, aka "The Pitch Coach". David has strong, seasoned, and instructive thoughts about entrepreneurs and presentations:

The primary hallmark of an entrepreneurial fundraising pitch as opposed to other types of presentations is that the most important factor by far is you. Investors are going to spend the entire session attempting to determine if you are the person behind whom they should invest their money, and how you come across personally is often more important than everything else combined, including your business plan, and industry and financial projections. This means that fundraising pitches must be given by the CEO and no one else. The top ten characteristics that investors will be looking to find in you during your presentation are:

Integrity
Passion
Experience (in starting a business)
Knowledge
Skill (in functional operating areas)
Leadership
Commitment
Vision
Realism
Coachability

Concerning the flow of your presentation, the single most important thing in sequencing a presentation is that everything must flow logically from beginning to end, and require no prior knowledge on the part of the audience. You do not want the audience to have to "think" at all, which means you need to answer every potential question at exactly the right place, just before the audience would think to ask it. It sounds easy, but 99% of presentations don't do it.
Well said. Reminds me a little of a previous muse, The jockey, the horse and the track, and a lot of an experience I had raising money many moons ago. Parked in a conference room with a prospective investor -- questing to close a funding round -- I asked the would-be backer for his thoughts about our business plan. Haven't read it, he said. Deflated, I sank like a helium-less balloon. Who's in, how much have you raised, and how much more do you need? I perked up, answered his question. Okay, I'm in. Shocked, I almost popped. I want you to know -- eye-contact galvanized -- I'm betting on you. Gulp.

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Post-script (14 Feb 08): Guy Kawasaki's a sage when it comes to pitches. Here's a terse summary of The 10/20/30 Rule of PowerPoint:

Ten is the optimal number of slides in a PowerPoint presentation because a normal human being cannot comprehend more than ten concepts in a meeting—and venture capitalists are very normal. (The only difference between you and venture capitalist is that he is getting paid to gamble with someone else’s money). If you must use more than ten slides to explain your business, you probably don’t have a business. The ten topics that a venture capitalist cares about are:

  1. Problem
  2. Your solution
  3. Business model
  4. Underlying magic/technology
  5. Marketing and sales
  6. Competition
  7. Team
  8. Projections and milestones
  9. Status and timeline
  10. Summary and call to action

Monday, February 11, 2008

Bang

There’s something insanely sick (or sickenly insane) about partaking in a meeting with predictably eyeoring Eyeores, especially when such contrarians are new acquaintances. Perhaps it’s a seventh sense: An ability to eye and engage Eyeores. Today baked the cake.

My friend Mike is chairing the homecoming committee for UCD’s Centennial celebration; I’m his co-conspirator. One-hundred years, and we’re tasked with throwing a party. Not just any fiesta: A big, boisterous, memorable, pop-the-cork event. Sounds like fun; I volunteered and joined his committee.

We had our first formal meeting today and quickly proffered five Bs for our desired bash: Bang (fireworks), Bands (the Cal Aggie Marching Band-uh! battling with a few of their compatriots), Bonfire (a big, hairy one), Beads (Mardi Gras-esque parade through downtown), and Beer (lots). Basic ingredients of a 10,000-Aggie party.

Before we could imagineer the what and why, our alter-ego Eyeores took command of the meeting: I’m sorry to be a wet blanket (the Eyeore Creed), but how can we do it? (Eyeore: We're never gonna get there!)

Don’t worry about the how, we injected. Let’s design the biggest and best party, this side of Picnic Day, Davis has ever absorbed.

Our five B’s were countered with five roadblocks: Staffing, funds, permits, liability and logistics. Makes sense if you’re trying to cover your rear or protect your cheese (or perhaps think pragmatically), but it’s a buzz kill if you’re volunteering to create a celebration.

I’m not sure if, come homecoming (October 11, 2008), fireworks will blast, bands will blare, a bonfire will blaze, beads will fly, or beer will flow. But, I am certain that if we employ a yeah, but … mindset, if we spend time thinking about how it will not work, if we’re defeated from the outset, we will fail. The solution – whether you’re throwing a party, launching a product, or starting a company -- rests in employing a tabula rosa to craft the ultimate what and why (thinking in a yes, and ... manner), and then figuring out how to make it happen.

Selfless

I met with a colleague today who is going through a divorce. We had calendared a chunk of time to brainstorm. Storm we did, but only after engaging more important stuff.

We talked about the selfless sacrifice of relationships, heavy stuff. And, we shifted gears to the immeasurable magnitude of giving yourself to your children, a subject that’s too important for this top-of-mind forum. It’s all about my kids, she shared. They are everything.

When you’re single, you are one. When you date, you become a pair. When you marry, you lean back toward one, but not quite; you become more allocentric, but maintain your self. When you have kids, you give and bear all. It is a cleansing and rewarding, exhausting and exhilarating, introspective and learning, patience-testing and fulfilling experience. It’s cool.

Flipping to the funny pages – less important stuff like entrepreneurship – building a company is similar, though with much less gravity. Successful enterprises are driven by selfless individuals. Ego plays a part, but it’s not the most important thing; team members park their self interests for the betterment of the cause. The company counts, not the accomplishments of individuals. Your slice of the pie may shrink, but it’s a larger and tastier pie.

I think you can be competitively, aggressively, and successfully selfless. When you help others succeed, you win; when you’re primarily concerned about yourself, you lose. Giving and sharing is a lot easier than taking and keeping.

Not only can we learn a lot from kids – in a creative, ideation sense – but we can garner much from the virtues of parenting. They are, as my friend expressed, everything.

Friday, February 8, 2008

Persist

Over a beer with a friend this week, the subject of startups wearing blinders percolated. Some people never learn, she mused. They perpetually do the same thing and make the same mistakes. Failing fast and failing better is virtuous, I chirped, kicking myself for instinctively regurgitating the theme of a previous blog post. Yep, she agreed, at least they [startups] are persistent.

I gulped, relating like a bobble head to many personal and professional experiences, in addition to the previously cited, herein, characterization of insanity: Doing the same thing over and over and expecting a different outcome.

Persistence is, of course and to a degree, is good. Check the dictionary: A person who is persistent is one who continues to follow the same course of action, no matter what. A persistent person keeps trying and trying. A person or company’s ability to persistently emerge and adapt – versus repeating the same mistakes – is a barometer to success.

The happy hour conversation reminded me of a go-get-em encouragement from my dad many moons ago. I had hit a wall – where, when, why and how, I can't recall – and he shared a tattered, 3x6” chronology residing above his desk:

Abraham Lincoln, 16th President of the United States
Defeated when he ran for the Illinois House of Representatives in 1832.
Defeated for the U.S. House of Representatives in 1843.
Defeated for the Senate in 1855.
Defeated for Vice President in 1856.
Defeated for the Senate again in 1858.
Elected President of the United States in 1860.

Treasure hunt

My kids love mazes and maps. There's something enchanting and engaging about starting at point A and weaving your way to point B. In particular, my boys (I sense) love the exploratory virtue of treasure maps; as the author and illustrator, I enjoy dreaming and charting their quest. Treasure hunts never get old.

Effectively communication and corporate strategy -- the route to build sustainable advantage in significant markets, as coined by my old strategy partner Paul -- is similar in its treasure-questing. Prophetic strategists are modern day cartographers.

From Wiki:

Cartography combines science, aesthetics, and technical ability to create a balanced and readable representation that is capable of communicating information effectively and quickly.
Whoa ... echoes/parallels thoughts herein (particularly here and here) about the virtue of clear, concise and cogent communication, along with creating a kick-ass corporate strategy. Wiki, please expand ...
The quality of a map’s design affects its reader’s ability to extract information, and to learn from the map. Cartographic symbology has been developed in an effort to portray the world accurately and effectively to convey information to the map reader. A legend explains the pictorial language of the map known as its symbology. The title indicates the region the map portrays; the map image portrays the region and so on. Although every map element serves some purpose, convention only dictates inclusion of some elements while others are considered optional.
Good stuff. Analogized, the quality of a person's communication affects its audience's ability to extract information, and to learn from the communication while engaging a sense of direction. Successful communicators portray their world accurately and effectively. They ground their communication, oftentimes pictorially, with meaningful symbols. Their title indicates their general theme; the substance (map and legends) provides support. Great communication is simple: Convention only dictates inclusion of some elements while others are considered optional.

Simple directions in the world of cartography vis-a-vis corporate strategy: Where to go (significant markets), how to get there (route), and what to do once you arrive (build sustainable advantage).

Tuesday, February 5, 2008

Now

Caught Barack Obama on CSPAN late last night. He was in Boston, delivering a primary-eve talk to a raucous crowd. Amazing stuff; it defies logic that he can lose, but paradoxically it will be extraordinary if he wins.

Early in his speech Barack quoted Martin Luther King. Something about the urgency of now ... thirsting for more, I Googled the relevant passage from MLK's speech (4 April 1967 in NYC):

We are now faced with the fact , my friends, that tomorrow is today. We are confronted with the fierce urgency of now… We must move past indecision to action.
Tomorrow is today. The urgency of now. Moving past indecision to action. Redkindles several rants herein, including our Just Do It lament.

Moving beyond inspiring words to pragmatic actions, think of personal, professional and athletic experiences, memorable, meaningful and measurable accomplishments in your life. Could be a tennis tournament where you kicked it into sixth gear, acting with an uncommon urgency and purpose. Or the moment you decided you wanted to spend the rest of your life with your spouse; tomorrow, perhaps you mused, is today -- let's do this. Or, the point in time where you truly -- emotionally, professionally, personally and financially -- committed to start a company. The time was then (now), and you shifted from indecision to action. You pointed your tips downhill with a great sense of urgency and purpose.

The urgency of now is paradoxically inspiring and scary. Reminds me of Eleanor Roosevelt's challenge: Do one thing every day that scares you. Living in today, floating through indecisive moments, resisting change (now!) is comfortable. Shifting gears to tomorrow, to action, to now is the spark (or ante) to great things. And, it beats the pulp out of the apathetic, ambivalent alternative.

Monday, February 4, 2008

POTW: Giving birth

It's Monday, early, and thus I feel a bit guilty and lazy dropping a post-of-the-week so soon. Too bad; couldn't resist. This week's is courtesy of Guy Kawasaki, based on an email pitch he received from an entrepreneur: “Everything you should know about me as an entrepreneur you could learn from my OB/GYN”. Here's the terrific email:

  1. I am very good at conceiving an idea.

  2. I can commit to something mind, body, and soul for at least nine months.

  3. I have the ability to over come adversity, such as eating healthily while puking all day.

  4. I can adapt quickly to changing and expanding situations.

  5. I stay focused and motivated even with a lack of oxygen to my brain.

  6. I am creative: Did you know with satin pajamas and satin sheets you can roll over in bed even with an extra sixty pounds.

  7. I am patient—ever known anyone ten months pregnant?

  8. I am cool under pressure: I gave birth to a ten-pound baby without a C-section or a properly functioning epidural and did not curse out my husband.

  9. I am resilient: I went back to work at my company four weeks after giving birth.

  10. I create meaning in the world! Even with all the trials and tribulations of becoming a parent I have chosen to do it twice so far because each new life gives hope and meaning to our world. Just like each new business.

I've enjoyed Kawasaki's tales about his kids and parenthood, vis-a-vis entrepreneurship and start-ups, in the past. He wraps with a few wonderful analogies: Children are the ultimate startup. And when they leave for college, it’s their IPO. And when they get married, it’s an M & A deal. And like most startups, these milestones usually take longer and cost more than you predicted. Parental success rates, however, are much better than even the best (seed-stage) venture capitalist’s.

Friday, February 1, 2008

Play ball

My dog, Berkeley, had a tumor removed from his chest Thursday. The three-plus hour surgery went well, and he's recovering in canine ICU. Pre-operation, I asked the surgeons about the tumor: What kind (thymoma), has it metastasized (no), how large (the size of a baseball). Fortunately, it was encapsulated and they extracted the whole ball of guck.

I'm a baseball nut, have been since I could grip a ball. Baseball is the closest thing to a personal religion; there's something devinely romantic and intoxicating about the pop of a mitt, the crack of a bat, the tonic of a beer and hot dog, the smell of fresh-cut grass, and the melodious holler (Beer, cold beer here; Bag of nuts, big bag of nuts) of an aisle-prowling vendor. Spring training cannot come soon enough.

Baseball is metaphorically rich. As I shared in a New Year's eve post, I enjoyed a ripe story from Tom Wolfe illustrating his research of the life of contemporary college students:

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 is learning their partner's name.
Metaphorically, there are many parallels to draw between baseball and business. I engaged the value of metaphors back in October ... here's a refresher (excerpted from Metaphors We Live By):
We understand experience metaphorically when we use a gestalt from one domain of experience to structure experience in another domain.
Sports metaphors and analogies -- especially baseball ones -- are intrinsically apt for business. People moan that sports metaphors are cliche or trite. Yes and no. They're useful as shorthand communication levers because they are cliched and therefore everybody knows exactly what they are intended to mean (including the emotional connotations they are supposed to have), without ambiguity. If you are trying to make sure people get your point quickly and clearly, then the more cliched -- that is, standardized -- your metaphor is, the more efficiently it helps you communicate.

Which reminds me of a conversation I overheard in Scottsdale at a Spring Training game several moons ago, two guys lounging in the outfield bleachers, musing about ...
... Dude, let's start a company. Cool. What's the ball game? I dunno. But we've gotta swing for the fences this time. Okay, what's the roster look like? Joey for sure: He's a clutch hitter, total utility man; we need guys who can play all positions. Who else? Well, we need some horses. How 'bout Steve for sales? Not bad as a set-up man. Miles is the guy we need to pitch; awesome closer with the swing-for-the-fences mentality we need. Mark for IT? Brutal; he’s way in left field. Total screwball. We'd be lucky if he got us to first base. Alright. Adam? Dude’s been on waivers for too long … he’s walking around with two strikes against him; total rain delay. Sarah's a diamond; HR? Tough call. She plays major league hardball and could be on waivers. May need to pinch hit for her while she's in the bullpen. How about John for marketing? Good free agent, but risky. John’s totally off base, big league liability; he likes to play the field.

Quick change-up: Ballpark, how much do we need to open the gates?
No clue, but if we wanna play in the bigs, we need to bust the salary cap; otherwise, we’ll get picked off and end up in the bush leagues. Okay. We’ve gotta act right off the bat if we wanna knock it out of the park. You game? Dude, you know my wife’s going to give me the hook; as much as I wanna play ball, I think I need a rain check. I’ll touch base in a few. Don't drop the ball on me. Keep me in the game in case you cross signals with your manager.