Archive for June, 2010
June 30th, 2010
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“Amateurs practice until they can get it right; pros practice until they can’t get it wrong.”
Mark Zimmerman in “Makes Perfect” (although may not be original with him)
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A startup walks into a bar and says “I’m going to revolutionize the way people walk into bars.”
Kevin Owocki
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“There will come a time when you believe everything is finished. That will be the beginning.”
Louis L’Amour opening lines to “Lonely on the Mountain“
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“If people who make millions of dollars a year were as honest as people who do not, we all might be a whole lot better off.”
Stanley Bing in “New York. Honestly.“
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“We cannot recapture the past, but sometimes it can recapture us–if we are not careful.”
Thomas Sowell in “Random Thoughts on the Passing Scene (June-8-2010)”
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“All is pattern, all life, be we can’t always see the pattern when we are part of it.”
Belva Plain
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“Were all men equal tonight, some would get the start by rising an hour earlier tomorrow.”
Elizabeth Gaskell
One reason to get out of bed to get to a 7:30am Bootstrappers Breakfast.
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“The Revolution will not be televised. The Revolution will be no rerun, brothers. The Revolution — will be live.”
Gil Scott-Heron, The Revolution Will Not Be Televised,
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“Best Practices, n.: Making the same mistakes everyone else does.”
Chris Barts in http://news.ycombinator.com/item?id=1283262
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“I got a feeling, and it won’t go away. oh, no.
Just one thing, then I’ll be okay.
I need a miracle every day.”
John Perry Barlow lyricist on “I Need a Miracle”
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“Life is full of miracles, but they are not always the ones that we pray for. ”
Eve Arden
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“The three requirements for influence are relevance, credibility, and insight.”
Dan Holden (@Dan_Holden)
I really like Dan’s triad of relevance, credibility, and insight; any two are probably not sufficient. Deft influence can unlock tremendous value.
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Empires build Death Stars, rebels build X-Wing fighters
Sean Murphy “Finding a Co-Founder: 3 Months is a Long Time“
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“The human race has now become almost a single entity, divided by time zones rather than the natural frontiers of geography.”
Arthur C. Clarke
see also Beat the Clock
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“Courage is the capacity to confront what can be imagined.”
Leo Rosten
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“History unfolds in the space between difficult and impossible.”
John Hayward in “The Pillars of Apathy“
More context
Every time I write something optimistic about the future of the United States, I hear from some doomsayers who assure me things will never get any better. Pessimistic conservatives say we’re locked into a death spiral, at the mercy of a system running on autopilot and programmed to crash. I also hear from some liberals who maintain there is no morally acceptable alternative to unsustainable Big Government, so we’re honor-bound to hold our course… right into the giant iceberg of insolvency approaching off the port bow.
I maintain my optimism by rejecting the ideas serving as the pillars of apathy.
I refuse to believe government programs launched in the Forties, Sixties, and Seventies are indestructible features of our lives, immune to repeal or reform. I don’t believe a nation with a 234-year history of courage and industry is destined to suffocate in a shallow pool of nanny-state cement, poured only a few generations ago. It will be difficult for the American giant to rise again… but history unfolds in the space between difficult and impossible.
There is no such thing as eternal legislation. Even the Constitution can be amended. It’s only a question of how much willpower it will take for us to cast aside the intolerable acts of our political class. We are descended from men who showed great vigor in resisting intolerable acts.
June 29th, 2010
- Don’t make an equity investment in your startup so that you can pay yourself a salary. Put enough money in to cover expenses in advance of revenue. Live off of savings.
Why: making an equity investment that you take back out as salary means that you are paying taxes for the roundtrip. The combination of Federal, state, and local taxes will cut your runway by 20-30%.
- If the company needs more money to cover expenses in advance of revenue then make a loan to the company at a realistic interest rate.
Why: if you choose to pay the expenses out of pocket they may not be deductible, if you buy additional stock in the company it is difficult to get the cash back out without paying taxes on it, either as dividends, salary, or bonus. The loan can be repaid and the only taxable component is the interest.
- Run consulting dollars through your new firm not your old one.
Why: this revenue can be used to offset costs and extend your runway. This also enables you to get on the approved vendor list for a firm you may later want to sell a product to.
- Don’t have one founder take a salary if both or all don’t get one.
Why: this inevitably causes a disconnect in motivation for both parties.
- Have one founder write each check and another sign it.
Why: do this from the beginning so that you minimize the risk of misunderstandings and have a simple review and approval process for expenses.
June 28th, 2010
Angela Maiers wrote a book called Classroom Habitudes (hat tip to Dorai Thodla) that I picked up last year and finally got around to reading. Maiers defines habitude as “a combination of habit and attitude. ” I was struck by how entrepreneurs would also be well served to cultivate them. She defines her six habitudes as
- Imagination. Discovery, innovation, creativity, and learning all begin with imagination.
- Curiosity. Champion learners are curious about everything. This inquisitive attitude fuels their unrelenting quest for continuous learning.
- Perseverance. Learners cannot go the distance without resolve, determination, firmness, and endurance.
- Self-Awareness. Knowing yourself, knowing your strength, preferences, and areas of need is a critical characteristic of a successful learner.
- Courage. Courageous learners understand that safe is risky. Success is the byproduct of taking risks.
- Adaptability. The world opens up for adaptable learners, as they approach each task, each challenge willing to be a beginner.
Maiers’ book reminded me of a great book by Gordon Mackenzie: “Orbiting the Giant Hairball.” He also talks in practical terms about fostering creativity and learning, but his focus is on the workplace. Mackenzie makes the point early on that if you go to a class of first graders and ask how many are artists , everyone jumps to their feet. By the sixth grade only one or two in a class of thirty will even raise their hand.
He observes “every school I visited was participating in the suppression of creative genius.” Both books offer some prescriptions for how schools and firms can remedy this.
Don’t let your workplace and management style have the same affect on your partners and employees.
June 27th, 2010
This post builds on my earlier “Finding a Co-Founder” and “Compromise & Get Started” posts on the challenges with finding a co-founder for your software startup. It assumes you are working at least part time with a potential co-founder exploring if you can collaborate successfully and generate revenue from a new jointly developed product or service. I think there can be a temptation to set a six to twelve month deadline to evaluate the working relationship. It’s something that I have done before and a timeframe that many entrepreneurs that I have compared notes with have also adopted.
I think this is a mistake. I think you have to give yourself 90 days to get to revenue based on the simplest product you can develop and sell that can be the great-grandparent of the “real product” that you are actually excited about.
Empires build Death Stars, rebels build X-Wing fighters.
This accomplishes several things:
- It forces you to make compromises on your design, which should encourage you to start talking to prospects right away.
- It focuses the team on what will generate near term revenue. It makes discussions with prospects probe what they will pay for is a useful counter-balance to a wide ranging discussion of what they want.
- Whoever is in charge of sales/marketing/business development to focus on “sell what you have” instead of specifying a full wish list of features. It’s no trick to use missing features as an excuse to delay the start of customer development activities like customer development and customer validation.
- Team members focused on development have to prioritize their efforts to an agreed upon feature set so that the team can get to early revenue (and early shared success as a results) as quickly as possible.
A while ago we did a custom workshop for a team that had been working together for more than nine months. They had met with some success but wanted to focus on improving their ability to set and hit targets. As we went through a couple of exercises and an after action on a recent release it came out that one team member was almost out of money and worried about the team’s ability to execute.
Afterward the workshop the CEO complained to me about one of his co-founders who had been the most vocal about his concerns: “I don’t understand, we agree we would go without salary for a year. He is not being fair.” I said, “in my experience, a year is too long to ask folks to go without some kind of compensation. And it postpones the start of your sales and marketing process. It’s easy for me to tell you that it’s a mistake because it’s one that I have personally made before.”
June 26th, 2010
Building on yesterday’s “Finding A Co-Founder” I want to identify a couple of common challenges to getting started with people you have had prior shared success with and offer some suggestions for how to manage them. I suggested the following approach:
- Make a list of everyone you have successfully collaborated with in the last decade or two.
- Recontact them and reconnect if you have lost touch.
- If their background, expertise and interest are a fit with your needs: assume that it will take a month or two to come to a working arrangement and get started.
I want to focus on what can be involved in coming to a working arrangement and getting started.
One common challenge you can face as entrepreneur is to be “in the grip of your new idea” to the extent it is hard to appreciate other perspectives. Even before you talk to prospects (whose perspective is always valuable) you will normally talk with friends and former co-workers. They will offer three common suggestions:
- There are potential drawbacks or challenges to implementing your idea that you need to address.
- There are key details missing from your plan (e.g. step 2 in the “gnome underpants business model” ) that you often view as a minor detail but may in fact be a major stumbling block that require you to do more hard thinking.
- Some other ideas may be better for you to work on given your strengths and experience. Sometimes, if they are also entrepreneurial, it will be their idea. More on this in a minute.
These responses are different from what you may hear from friends who may not appreciate your entrepreneurial aspirations and who will often offer these perspectives:
- If you are employed: “This is the Great Recession, don’t even think about quitting your job.”
- If you are not employed: “Don’t even think about starting a company, find a job until the economy improves.”
Note in both cases these are people you trust and who have your best interests at heart. The second group may even be right about your prospects for getting a startup off the group. But the second set is not a good place to recruit co-founders from. If they don’t have entrepreneurial aspirations, do not waste their time or yours trying to convince them to leave their job to start something with you.
The first group is much more promising. And in fact the primary stumbling block is often that they have ideas of their own that they want you to help them make real. There is a strong temptation to continue to talk to friends and former co-workers and then continue on to strangers in the hopes that someone will drop what they are working on and fully embrace your idea. I think this is a mistake.
Building trust takes months and requires ongoing mutual expectation setting and delivery. If you can start working with someone that you have worked with previously and enjoyed some success with you have substantially reduced the risk of a breakdown in team dynamics. I think it’s better to compromise and start working where you compare notes in a co-working model to can help generate forward progress. Agree to spend one or two days per week assisting the other person, or trade-off one day a week with two other people each to explore their current best idea.
This will allow you get better at customer discovery and customer validation. You will have a useful emotional distance on their ideas and will be able to help even if you ultimately go your separate ways. And they can help you, creating accountability for results and progress that is harder if you are working alone.
It’s likely your idea is going to evolve in response to what you learn while exploring it and you may be able to come to a blended idea in a month or two. Worst case you have made forward progress, you have someone you can bounce ideas off of and get their perspective, and working on their project may also give you a useful frame of reference for evaluating your own ideas.
“Stand in the place where you are
Your feet are going to be on the ground
Your head is there to move you around.”
from lyrics to “Stand” by R.E.M
June 25th, 2010
What follow is based on both my direct experience and stories folks have shared at the Bootstrappers Breakfast over the last few years. Your co-founder can come from one of three groups
- friend, current co-worker, former co-worker
- friend of a friend or former co-worker, someone who trusts someone you trust
- stranger / other
Make a list of everyone you have successfully collaborated with in the last decade or two.
Recontact them and reconnect if you have lost touch.
If their background, expertise and interest are a fit with your needs: assume that it will take a month or two to come to a working arrangement and get started.
If they are not a direct fit explain the kind of co-founder or co-founders you are looking for. If they can introduce you to someone that they can vouch for, and vouch for you to the other person, take some time and work on a small project or two.
Allow three to six months to come to a working relationship. Consider adding your fried or former co-worker as an equity compensated advisor.
If you meet a stranger at a Meetup, a Startup Week, a Bootstrapper breakfast or other event and do not have friend or former co-worker in common assume that
- It will take working together on two or three projects of escalating complexity before you can have enough data to be able to ask them to help you create a company.
- You will need to meet as many folks that they have worked with as possible with relevant knowledge for your startup. Create an informal advisory board (“kitchen cabinet”) that has one or two folks they know and one or two that you know.
- You will need to allow three to nine months working on a few projects of escalating complexity before you can make a find decision to go forward with them.
June 24th, 2010
- Actively Manage Expectations With Clear Communications
- Always Assume Everything You Do Will Become Public
- Listen For What Isn’t Being Said
- Predictable Behavior Inspires Trust
- Trust Doesn’t Scale, It’s Knit by Aligning Actions With Prior Commitments
Related Posts
June 23rd, 2010
Excerpts from section 7 “Seek Wisdom, Competence, and Confidence” of “Slow Down to Speed Up” by Ronald J. Stupak and David S. Greisler
The half-life of information is six months.
The half-life of wisdom is a lifetime.
The self is not infinitely elastic. It has potentials and it has limits. If the work we do lacks integrity for us, then we, the work, and the people we do it with will suffer.
Fundamentally, there must be a blend and a balance among your intellectual quotient, your emotional quotient, and your spiritual commitments, as you move from the notion of learning to the motion of acting. Thinking without action is futile, action without thinking is fatal, and doing either without a deep commitment to community, interpersonal collaboration, professional competence, and personal confidence is to fail.
Perpetual optimism, positive attitudes, and purposeful performance lead to positive actions.
June 22nd, 2010
Two years ago we asked the question “Are You Generating iPod Fishbowl Leads” I was reminded of this by a recent post by Simon Favre “You Can’t Give Stuff Away Fast Enough” about his recent experiences at DAC 2010 working in both the Global Foundries (GF) and TSMC booths.
At TSMC, the attendees needed to get something like 8 stamps on a card to get the nice giveaway TSMC was providing. At GF, there were only 3 stamps. It turns out that when people have to collect a large number of stamps for one item, they will not stand at your booth any longer than it takes to get the stamp and maybe fill out a contact card to be entered in another drawing. When there are fewer stamps to collect, people will actually stay for several minutes and listen to a pitch. Sure, there were some people just wanting a free introduction to a topic outside their main area, but that’s OK. It’s good to spread the word, particularly about DFM. Some people were probably just being polite to listen before collecting the stamp, but still they listened. When there are too many stamps to collect, you don’t even get that. Bottom line, if you’re giving stuff away, you can’t give it away fast enough.
How would I change this? Require fewer stamps, but require the attendees to stand still for 5 minutes to hear a brief pitch to get the stamp. Maybe if it’s interesting and pertinent, they’ll stay longer than required, but they should have to stay at least a little while to get a stamp. In trying to get more partners into the pavilion, and get attendees to see more partners, it actually works against the partners. I had way more interested people listening and discussing at GF than at TSMC. Just my observations.
I think this points up a disconnect between marketing and sales in a large firm that can be fatal for a startup. If you collect someone’s card because they wanted an iPad or other give-away, but they fundamentally have no interest in your product, you are creating an hour or more of wasted effort by your sales team per “unqualified lead.” In larger firms the marketing folks keep score on lead generation not revenue so they have a perverse incentive to do this. In a bootstrapping startup everyone needs to realize that revenue is what keeps the lights on and the dream alive.
The more time you waste on irrelevant prospects is less time you can spend on the truly interested. Even wasting five minutes of booth time pitching to the uninterested is less useful than being ready for a conversation with someone who is interested. I understand that you need to talk to a lot of prospects to find a few that are truly interested, and that it never hurts to tell your story to someone who is even mildly interested (although you might make exceptions for offering a lot of detail to competitors).
But as a startup you have to ruthless about prioritizing your sales efforts: this means you are asking as many questions of someone visiting your booth to make sure that they have a problem you can help solve or a need you can address as telling them about your product and your company. That way when you take their card or scan their badge you can make a note of the level of follow up that is warranted.
It’s much more useful for a startup to come back from a show with five or ten very interested prospects and a few dozen “warm leads” than hundreds of cards from visitors who wanted to win that iPad. In the latter case, if you haven’t had the time to have a conversation and understand your visitor’s situation and issues, you will have no idea of who is really a hot prospect and where to focus your efforts.
June 21st, 2010
Kurt Keutzer was interviewed June 8, 2010 on the DAC website and he had a number of interesting things to say about engineering and entrepreneurship. What follows are some excerpts but it’s worth reading the entire interview. I have added several hyperlinks for context.
Career advice he gives his students:
- I think that every engineer needs to realize today that fundamentally they are a corporation of size 1. There’s no lifetime employment and a career is no longer a simple matter of riding the escalator in a big company. Individual entrepreneurship is a requirement, not an option.
- Every engineer needs to know how to assess the value of the technology they are working on. They need to know the difference between a technology, a product, and a market-maker.
- To do this they need to know how to identify a market, size it, and segment it. They need to understand the difference between technological advance and creating customer value, and that customers will pay for value and not, per se, technology.
- To understand this they have to be able to take a step back from technology and see the world through the eyes of the customer.
- In terms of career directions my advice is go where the growth is. In Foster’s classic S-curve [from "Innovation; The Attacker's Advantage], areas of technology tend to go through long fallow periods in which not much progress is made. Then there’s a period of explosive growth. Then there’s another long fallow period. You want to be right around the inflection point of explosive growth. Putting a lot of effort in an area, either too early or too late, will not yield results comparable to what even a modest amount of effort will yield when invested at the right time.
How would he apply technology S curve analysis to EDA?
- I wish I knew. EDA seems to be experiencing one of its longest plateaus in its history.
- EDA and the semiconductor industry seem to be in what could be called a “non-virtuous cycle” (i.e., a vicious cycle). New generations of EDA tools are not improving individual productivity very dramatically even as Moore’s Law continues. So the cost of building chips, of which the principal component is human capital, has risen exponentially. This high cost has led to fewer and fewer leading-edge designs each year. This means that EDA companies must charge the leading-edge customers more and more to keep their revenues up. This means the cost of leading-edge design increases further. It’s a downward spiral.
- FPGA suppliers have created another “non-virtuous cycle.” FPGA makers seek to control their own destiny by giving away tools for free. There are two problems with this.
- The tools FPGA vendors give away aren’t very good so designers aren’t very happy with the flows. For example, I can’t get my students to use FPGAs anymore if they have the alternative to use software-programmable standard parts.
- Because the tools are free, third-party tool companies can’t get a foothold to provide better tools. I believe that poor tools and design flows is one of the biggest inhibitors to the growth the FPGA industry.
Update June-23-2010: Paul McCllelan offers this perspective on what’s holding EDA back in his “DAC 2010 Retrospective”
EDA is still somewhat stuck in an outmoded style of design that assumes the chips are designed from scratch and then someone writes some software to run on them. In fact much of the software already exists: software generations are 10 times as long as chip generations, and chip design is increasingly about IP assembly rather than efficient design from scratch. I continue to believe that this block-level is an interesting choke point, with the potential to generate a virtual platform for the software developers and testers, and the potential to turn the design rapidly into an FPGA or SoC. But the tools don’t yet exist.
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