Archive for May, 2012

Quotes For Entrepreneurs–May 2012

Written by Sean Murphy. Posted in Quotes, skmurphy

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“Details as they settle with imperceptible weight but irrevocable consequences, like snowflakes falling on a baffled demon’s upturned face.”

I did a whole series of these “details as they unfold…” tag lines for my E-Mails when I worked in marketing at Cisco in the 90′s. I am scrubbing the bit rot off of them and will be reposting them here just to mix things up.  This was inspired by Harlan Ellison’s “U is for Uphir” in “A to Z in the Chocolate Alphabet” where

Without volition, Semiazas began to make it snow in Hell. Instantly, hundreds of thousands of foolish promises, idle boasts, dire threats, and contracts Satan had made containing the phrase “It’ll be a cold day in Hell” (on which he never thought he’d have to deliver) came true.

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Since we participate in the fields of advanced and rapidly changing technologies, to remain static is to lose ground.”
David Packard “The HP Way

Ironically this was used by Carly Fiorina to justify merger with Compaq, probably the worst decision HP made, if you don’t count hiring Fiorina or her two successors. More context from page 141 from the “HP Way”

“Over the years Bill Hewlett and I had speculated many times about the optimum size of a company. We did not believe that growth was important for its own sake. However, continuous growth was essential for us to achieve our other objectives and to remain competitive.  Since we participate in fields of advanced and rapidly changing technologies, to remain static is to lose ground. Also, we depended on attracting high-caliber people to the company, people wanting to align their careers only with a company that offered ample opportunities for personal growth and progress.”

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“A pinch of probably is worth a pound of perhaps.”
James Thurber in “Such a Phrase as Drifts Through Dreams”

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“Acquiring capital is easy. Acquiring customers is hard. If you’re experiencing the opposite, call me. I’ll wire the funds today.”
Andrew Razeghi
(@andrewrazegh)

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“Every guy who has done a successful start-up somehow feels he’s therefore become the philosopher-king of business.”
Jim Manzi in “How to Succeed in Business by Really, Really Trying

Context from his opening two paragraphs embeds a strong critique of autobiographies marketed as treasure maps:

First, even though every guy who has done a successful start-up somehow feels he’s therefore become the philosopher-king of business, all experience is bounded. Any observations I make apply to venture-backed enterprise software targeting scale-up. Many of the things you would do for a biotech start-up or a consumer-oriented social media business, as examples, are probably very different. Further, there are companies that exist to sell products at a profit, and companies that exist to sell equity to investors. I only know about the former. The latter tend to flourish in the later stages of a bubble, and rely on a totally different set of skills related to promotions, networking and PR.

Second, even within the universe of relevant companies, all “rules for success” are either obvious or incomplete. Each suggestion in this post will be incomplete, in that it will ignore inevitable exceptions and complications. In other words, there are no rules for success. If there were, lots more people would do successful start-ups.

I used this in “Jim Manzi: Focus on Delivering Value to Customers at a Foreseeable Profit.

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“Strategy is crossing a valley: accepting short-term losses to reach a higher hill in the distance.”
Neal Stephenson

paraphrased from

“Any strategy that involves crossing a valley—accepting short-term losses to reach a higher hill in the distance—will soon be brought to a halt by the demands of a system that celebrates short-term gains and tolerates stagnation, but condemns anything else as failure. In short, a world where big stuff can never get done.”
Neal Stephenson in “Innovation Starvation

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“When you see a good move, look for a better one.”
Emanuel Lasker

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“We’re all connected. Knowing people is worthless. Trusting people is priceless. Choose advisors people trust not those who ‘know people.’”
Andrew Razeghi
(@andrewrazegh)

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“Empathy isn’t dictated to us by a focus group or a statistical analysis. Empathy is the powerful (and rare) ability to imagine what motivates someone else to act. [...] What is required is a persistent effort to understand how other people see the world, and to care about it.”
Seth Godin in “If I Were You…

Used for the opening quote to”Conversations with Prospects: Practice, Review, Share Notes, and Ask for Feedback

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“Focus on delivering value to customers at a foreseeable profit.”
Jim Manzi in “How to Succeed in Business by Really, Really Trying

Used as the title for  “Jim Manzi: Focus on Delivering Value to Customers at a Foreseeable Profit.

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“Our greatest weariness comes from work not done.”
Eric Hoffer

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“Genius is courage in one’s talent.”
Ludwig Wittgenstein

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“The most painful state is remembering the future, particularly one you can never have.”
Soren Kierkegaard

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Are You Using Cognitive Task Analysis for New Market Exploration?

Written by Sean Murphy. Posted in 3 Early Customer Stage, Books, Rules of Thumb

I am interested in talking with anyone who is using Cognitive Task Analysis (CTA) or Naturalistic Decision Making (NDM) methods and paradigms to inform their customer interviews. I have been reading  “Working Minds: A Practitioner’s Guide to Cognitive Task Analysis” by Gary Klein et. al. and I had an epiphany that these techniques would be directly applicable to a startup developing analytics or collaboration software. CTA/NDM techniques appear to be in active use for the analysis of military, health, fire and safety, and other problem domains where experts need to make life and death decisions in ambiguous situations against short deadlines.

I have been a fan of Gary Klein ever since I read a 1998 Science News article “Seeing Through Expert Eyes” that described his “naturalistic decision making” model:

…one of many examples of decision-making expertise collected over the past 20 years by psychologist Gary Klein. [...] Klein is helping to develop a research perspective—known as naturalistic decision making, or NDM—for unraveling how people become bona fide experts in performing complex, real-life tasks.

“In many dynamic, uncertain, and fast-paced environments, there is no single right way to make decisions,” Klein says. “Experts learn to perceive things that are invisible to novices, such as the characteristics of a typical situation. They make high-quality decisions under extreme time pressure. When difficulties arise, experts find opportunities for improvising solutions.”

Klein has written several excellent books on decision making and expertise

In “Sources of Power” he outlines a “recognition primed decision making” model for how experts manage uncertainty against tight time and resource constraints–situations analogous to many challenges bootstrapping entrepreneurs face. I quoted him in my “Limits of I’ll Know It When I See It” talk on  expertise driven companies.

Klein divides his time between MacroCognition and ARA, the latter firm has a page on cognitive task analysis at  that breaks it into three phases (Working Minds goes into much more detail in 300+ pages):

  • Knowledge Elicitation is the process of extracting information, through in- depth interviews and observations, about cognitive events, structures, or models. Often the people who provide this information are subject matter experts (SMEs) People who have demonstrated high levels of skill and knowledge in the domain of interest.
  • Analysis is a process of structuring data inspecting, selecting, simplifying, abstracting, and transforming information, developing explanations, and extracting meaning. CTA practitioners use a range of quantitative and qualitative analyses in handling data.
  • Knowledge Representation is the process of displaying data and depicting relationships, explanations, and the meaning derived from data analysis. This step is integral for enabling other people sponsors, customers, system designers who understand the results of the CTA.

Working Minds highlights “Concept Maps” (see for example http://cmap.ihmc.us/publications/researchpapers/theorycmaps/theoryunderlyingconceptmaps.htm ) as a powerful way to summarize interviews with experts and allow multiple experts to compare notes. I would welcome any insights on using either Cognitive Task Analysis or Concept Maps as of part of the customer interview process. My current approach also involves two people taking notes but using a wiki for hyperlinking connections instead of a graphical representation and collecting verbatim quotes instead of trying to code interview answers.

For more context I have blogged about Klein’s work at

Your Prospects and Your Customers are Real People

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

I’m hardly the first person to complain about the word “user” to describe people who do stuff with software…People don’t think of themselves as “users” and in all other contexts the word “user” is not generally positive and certainly not evocative of the kind of intimate, day-to-day relationship we’d like our work to have with the people who interact with it.

[...]

Perhaps if we all thought of it more as the Minimum Human Experience (hereafter referred to as MHX) we’d be less likely to release products that aren’t ready just to get them rushed out the door and instead focus our thinking on what the smallest coherent and valuable experience for a real person would be.

Nathan Dintenfass in “Human Experience

Your prospects and your customers are real people.

Give careful thought to the impact of your offering not only on their ability to finish a task or do their job or to grow their business but also on their mental state and emotions.

Exercise care in your sales and marketing efforts to avoid treating them with any less respect than you would a relative.

Assume that they want to perform meaningful work and improve their skills: give them tools and environments that enable them not only to contribute but to succeed and to flourish.

Memorial Day 2012

Written by Sean Murphy. Posted in skmurphy

Memorial Day is when we commemorate those who died in the service of our country. I offer some excerpts from Lt. Col. Michael Strobl’s account of escorting the remains of a Marine killed in combat in 2004 for you to meditate on.

Chance Phelps was wearing his St. Christopher medal when he was killed on Good Friday. Eight days later, on April 17, I handed the medallion to his mother. I didn’t know Chance before he died. Today I miss him.

Over a year ago, I volunteered to escort the remains of Marines killed in Iraq should the need arise. The military provides a uniformed escort for all casualties to ensure they are delivered safely to the next of kin and are treated with dignity and respect along the way.

[...]

From Dover to Philadelphia, Philadelphia to Minneapolis, Minneapolis to Billings, Billings to Riverton, and Riverton to Dubois we had been together. Now, as I watched them carry him the final 15 yards, I was choking up. I felt that as long as he was still moving, he was somehow still alive. Then they put him down above his grave. He had stopped moving.

Strobl’s account details the simple acts of support and respect that he witnessed on his journey. It’s available at

His account was also the basis for an HBO feature “Taking Chance” that I found very moving when I watched it for the first time about two weeks ago.

Related Posts

David Foster Wallace: The Only Choice We Get is What to Worship

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

What follows are excerpts from a commencement speech given by David Foster Wallace to the 2005 graduating class at Kenyon College. I thought they were an appropriate antidote to a model for entrepreneurial motivation that aspires to make enough money to do whatever you want. Wallace outlines some of the risks in failing to align your life with a higher spiritual purpose. On-line links to the full address are provided a the bottom, it’s also available in book form in “The Best American Nonrequired Reading (2006)” and stand-alone as “This is Water.”

There are these two young fish swimming along, and they happen to meet an older fish swimming the other way, who nods at them and says, “Morning, boys, how’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, “What the hell is water?”

If at this moment, you’re worried that I plan to present myself here as the wise old fish explaining what water is to you younger fish, please don’t be. I am not the wise old fish. The immediate point of the fish story is that the most obvious, ubiquitous, important realities are often the ones that are the hardest to see and talk about.

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In the day-to-day trenches of adult life, there is actually no such thing as atheism. There is no such thing as not worshipping. Everybody worships. The only choice we get is what to worship. And an outstanding reason for choosing some sort of God or spiritual-type thing to worship — be it J.C. or Allah, be it Yahweh or the Wiccan mother-goddess or the Four Noble Truths or some infrangible set of ethical principles — is that pretty much anything else you worship will eat you alive.

If you worship money and things — if they are where you tap real meaning in life — then you will never have enough. Never feel you have enough. It’s the truth.

Worship your own body and beauty and sexual allure and you will always feel ugly, and when time and age start showing, you will die a million deaths before they finally plant you.

On one level, we all know this stuff already — it’s been codified as myths, proverbs, clichés, bromides, epigrams, parables: the skeleton of every great story. The trick is keeping the truth up-front in daily consciousness.

Worship power — you will feel weak and afraid, and you will need ever more power over others to keep the fear at bay. Worship your intellect, being seen as smart — you will end up feeling stupid, a fraud, always on the verge of being found out. And so on.

Look, the insidious thing about these forms of worship is not that they’re evil or sinful; it is that they are unconscious. They are default-settings. They’re the kind of worship you just gradually slip into, day after day, getting more and more selective about what you see and how you measure value without ever being fully aware that that’s what you’re doing.

And the world will not discourage you from operating on your default-settings, because the world of men and money and power hums along quite nicely on the fuel of fear and contempt and frustration and craving and the worship of self. Our own present culture has harnessed these forces in ways that have yielded extraordinary wealth and comfort and personal freedom.

[...]

But of course there are all different kinds of freedom, and the kind that is most precious you will not hear much talked about in the great outside world of winning and achieving and displaying. The really important kind of freedom involves attention, and awareness, and discipline, and effort, and being able truly to care about other people and to sacrifice for them, over and over, in myriad petty little unsexy ways, every day. That is real freedom. The alternative is unconsciousness, the default-setting, the “rat race” — the constant gnawing sense of having had and lost some infinite thing.

[...]

The capital-T Truth is about life before death. It is about making it to 30, or maybe 50, without wanting to shoot yourself in the head. It is about simple awareness — awareness of what is so real and essential, so hidden in plain sight all around us, that we have to keep reminding ourselves, over and over: “This is water, this is water.”

It is unimaginably hard to do this, to stay conscious and alive, day in and day out.


The full talk is available at

Conversations With Prospects: Practice, Review, Share Notes, Ask for Feedback

Written by Sean Murphy. Posted in 3 Early Customer Stage, skmurphy

“Empathy isn’t dictated to us by a focus group or a statistical analysis. Empathy is the powerful (and rare) ability to imagine what motivates someone else to act. [...] What is required is a persistent effort to understand how other people see the world, and to care about it.”
Seth Godin in “If I Were You

Engineers and scientists tend to have more  of an affinity for technology than people and can find the conversations with prospects and early customers particularly challenging. Face to face conversations and phone conversations unfold in real time and require that you manage a number of things in parallel:

  • actively listening to not just what’s said but the tone and emphasis
  • considering the implications (especially for what is not said)
  • developing and prioritizing follow on questions
  • considering what additional informational from your own perspective to provide, in particular to establish a common context
  • managing your own emotions so that your tone is consistent and allows your words to be heard (for example when a prospect calls your baby ugly).

In  a face to face conversation you also must manage:

  • paying attention to the other participants facial expressions and body language
  • managing your own facial expressions and body language

All of the subtleties of tone and body language mean that an audio recording captures perhaps 30-50% of what’s being said and a transcript perhaps 10-20%. This means that a webinar filters a lot of what you can learn from a prospect and reading a transcript is less useful than reading a participant’s written summary of their impressions and key statements from the conversation.

The goal of these conversations is not only to learn more about a particular prospect’s needs (and therefore more about what niche market requirements are) but also to establish trust so that you can have additional conversations spanning e-mail, phone, and face to face interactions. And in some cases the goal evolves to a financial transaction where they pay for a product or service. So it’s not only exchanging information and perspectives but establishing trust and credibility that can support an ongoing business relationship.

At a deeper level the ability to have a serious conversation looks like a lot like riding a bike, you have to integrate several simultaneous activities into a mindful whole. Sustaining a serious conversation requires not only self-awareness and the ability to manage your own transient emotional reactions to their statements or reactions, but empathy for nuances of the other person’s responses (verbal and non-verbal).

“Between stimulus and response, there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.”
Viktor E. Frankl in “Man’s Search for Meaning”

We help entrepreneurs anticipate, mitigate, and recover from communication mismatches with prospects, customers, and partners. These communication challenges are common, especially in the early part of a new relationship. The good news is that there are a number of things you can do to get better and minimize the chances for a problem:

  • Practice an opening statement or an answer to a commonly asked question so that it flows naturally. Record and listen to yourself. Video tape yourself to gain insights into when you body language and facial language may be working against a point you are trying to make or may discourage the other person from elaborating.
  • Review e-mails and presentations with others who are a reasonable proxy for your audience. Read e-mails aloud so that you make sure you have captured a conversational style. Record live talks and presentations in audio or video to be able to assess where you need to improve.
  • Take notes in public: type key comments a prospect or customer says into the chat window in a webinar to let them know that you are listening. Do the same in a skype call. Provide an e-mail summary of a conversation or phone call to communicate what you heard, also include what you felt were the key points you made but start with the other person’s key points first. They will often amend or extend their remarks and minimize the risk of a misunderstanding.
  • Ask for feedback: ask a prospect in a follow up communication what was the most useful thing they heard, the least useful, the most surprising, and anything that you failed to do that they expected you to do.

Many sales opportunities fail to progress because there is a mismatch between the communication style and content that a prospect needs or prefers, not just to understand your offering but23 to believe that you can deliver and to act on particular proposal. Please contact us if you find it difficult to get conversations started or sustained with prospects or you feel that your current approach could be more effective. We can assist in several ways:

  • de-brief on existing calls or presentations
  • help you to rehearse. provide specific actionable suggestions for how to improve
  • review current e-mails, forum postings,  and other communication with an eye toward improving and creating a common set of templates so that  a consistent tone can be maintained
  • interview current customers and former prospects to determine areas for improvement and opportunities for case studies and testimonials, additional content that can make it easier to initiate or sustain a conversation as well as shorten the time a prospect needs to make a decision about your offering.

See also http://www.skmurphy.com/blog/2009/02/14/the-limits-of-customer-relationship-management-systems/

Jim Manzi: Focus on Delivering Value to Customers at a Foreseeable Profit.

Written by Sean Murphy. Posted in 3 Early Customer Stage, 4 Finding your Niche

Jim Manzi, founder of Lotus and Applied Predictive Technologies has a great blog post “How to Succeed in Business by Really, Really Trying “on the limits of advice to entrepreneurs, in particular autobiographies sold as “treasure maps” Here are his opening two paragraphs

First, even though every guy who has done a successful start-up somehow feels he’s therefore become the philosopher-king of business, all experience is bounded. Any observations I make apply to venture-backed enterprise software targeting scale-up. Many of the things you would do for a biotech start-up or a consumer-oriented social media business, as examples, are probably very different. Further, there are companies that exist to sell products at a profit, and companies that exist to sell equity to investors. I only know about the former. The latter tend to flourish in the later stages of a bubble, and rely on a totally different set of skills
related to promotions, networking and PR.

Second, even within the universe of relevant companies, all “rules for success” are either obvious or incomplete. Each suggestion in this post will be incomplete, in that it will ignore inevitable exceptions and
complications. In other words, there are no rules for success. If there were, lots more people would do successful start-ups.

He then proceeds to offer some hard earned advice very applicable to bootstrapping a startup, in particular

Have a co-founder. Ideally, you should have high overlap in your view of the world, and only partial overlap in your skill sets.

I think technology startups require so many distinct skills that it’s difficult for one person to have enough critical experience to be able to persevere. Shared values and distinct skills would be my shorter phrasing for his recipe.

Seek blue water. Do something innovative enough that nobody else is even trying. This is the best way to get around scale advantages that others have over you. Since you don’t know what you’re doing yet, it’s better if nobody else does either.

One of the best ways to do this is find two or three people with distinct knowledge or expertise where the combination is novel. I think it’s often less a matter of new inventions or discoveries and more about unique or novel combinations or applications of diverse and seeming unrelated knowledge and technology.

Always assume an average amount of luck in the long-run, and terrible luck in the short-run.

Don’t be too pessimistic or you will end up wearing a belt, suspenders, duct tape, and a wetsuit to hold your pants up. But nothing new ever works so assume it will take a few tries to get a novel combination to a basic level of usefulness.

Focus on delivering value to customers at a foreseeable profit.

I think this is probably the core piece of advice. Understand who is going to pay you, why, and how much.

Treat revenue and (especially) profit are the best possible feedback on your ideas.

Of all the forms of encouragement that an entrepreneur can take advantage of, a customer’s check is irreplaceable.

Cash flow breakeven is the most important milestone your company will ever achieve.

I think this  is the watershed event in the life of a startup, not the first order or getting an investment but getting to break even. Once this happens you have an infinite runway for experiments to scale up, before then it’s only a matter of time until you have to reconsider. Breakeven normally requires focus on a niche unless you are very fortunate.

The Wit to See and Understand Objective Reality

Written by Sean Murphy. Posted in skmurphy

Here is a second excerpt from Readme; this one is suggests that a shared situational awareness enables fluid coordinated action at a team level. Stephenson makes explicit reference to the OODA loop earlier, one character describing how the loop collapses to “observe-act” when the rapid action is required: orientation is implicit and decisions are the results of reflexes and prior rehearsal.

“This was probably rooted in a belief that had been inculcated to him from the get-go: that there was an objective reality, which all people worth talking to could observe and understand, and that there was no point in arguing about anything that could be so observed and so understood. As long as you made a point of hanging out exclusively with people who had the wit to see and to understand that objective reality, you didn’t have to waste a lot of time talking. When a thunderstorm was headed your way across the prairie, you took the washing down from the line and closed the windows. It wasn’t necessary to have a meeting about it. ”

from Reamde by Neal Stephenson

Finding co-founders and early employees who have “the wit to see and to understand that objective reality” is one of the keys to success in  a startup.

Great Demo! Workshop on October 10 & 11, 2012

Written by Theresa Shafer. Posted in Demos, Events, Sales

Create and Deliver Surprisingly Compelling Software Demonstrations
“Do The Last Thing First” — the recipe for a Great Demo!

This is an interactive workshop with Peter Cohan geared especially for you who demonstrate B-to-B software to your customer and channels. Bring a copy of your demo and be prepared to present it — we’ll help you turn it into a surprisingly compelling demo. More information

Core Seminar & Advanced Topics
October 10 & 11, 2012
Cost: $930 (Before Sep-24: $895)
Register Great Demo
Single Day – Core Seminar Only
October 10, 2012
Cost: $620 (Before Sep-24: $595)

Where: Moorpark Hotel, 4241 Moorpark Ave, San Jose CA 95129
For out of town attendees: The Moorpark is located 400 feet from the Saratoga Ave exit on Hwy 280, about 7 miles from San Jose Airport and 35 miles from San Francisco Airport Hotels Near Great Demo! Workshop

“I am confident that with the insights gained from your workshop we will land more customers in fewer iterations.”
Lav Pachuri, CEO, Xleron Inc.

“Peter Cohan’s Great Demo method really works. It helped us win DEMOgod, and it has allowed us to explain our offering much more clearly to prospects.”
Chaim Indig, CEO, Phreesia
(See “DEMOgod Winner Phreesia Praises Peter Cohan Training“)

More information on the workshop

ABOUT THE SPEAKER: Peter Cohan, Principal at Second Derivative
Community Web Site: www.DemoGurus.com

Peter Cohan is the founder and a principal of The Second Derivative, a consultancy focused on helping software organizations improve their sales and marketing results. In July 2004, he enabled and began moderating DemoGurus®, a community web exchange dedicated to helping sales and marketing teams improve their software demonstrations. In 2003, he authored Great Demo!, a book that provides methods to create and execute compelling demonstrations. The 2nd edition of Great Demo! was published March 2005.

Before The Second Derivative, Peter founded the Discovery Tools® business unit at Symyx Technologies, Inc., where he grew the business from an empty spreadsheet into a $30 million operation. Prior to Symyx, Peter served in marketing, sales, and management positions at MDL Information Systems, a leading provider of scientific information management software. Peter currently serves on the Board of Directors for Collaborative Drug Discovery, Inc. and the board of advisors for Excellin, Inc. He holds a degree in chemistry.

Peter has experience as an individual contributor, manage and senior management in marketing, sales, and business development. He has also been, and continues to be, a customer.

Day 1 Agenda:

  • 8:00 AM Breakfast & Registration
  • 8:15 AM Workshop begins
  • Noon Lunch
  • 1 PM Workshop Continues
  • 5 PM Wrap up

Day 2 Agenda:

  • 8:00 AM Breakfast & Registration
  • 8:15 AM Workshop begins on Advanced Topics
  • 12:30pm Wrap up

Seating is Limited

For more information: Theresa 408-252-9676 events@skmurphy.com

Founder as Change Agent from Reamde

Written by Sean Murphy. Posted in skmurphy

“It had taken him a while to decode it [...] but he’d eventually figured out that this, in the end, was the reason that Corporation 9592 had no choice but to keep him around. Every other thing that he had done for the company [...] could be done better and more cheaply by someone who could be recruited by a state-of-the-art head-hunting firm. His role, in the end, had been reduced to this one thing: sitting in the corner of meeting rooms or lurking on corporate email lists, seeming not to pay attention, growing ever more restless and surly until he blurted something out that offended a lot of people and caused the company to change course. Only later did they see the shoals on which they would have run aground if not for Richard’s startling and grumpy intervention.

This was one of those times.”

from Reamde by Neal Stephenson

I just finished Reamde, it has sat on my shelf for more than a year but once I started it I could not put it down. Neal Stephenson makes a number of thoughtful observations, describing real situation with grace. This passage in particular stood out for me, capturing not only the psychology but the unique value technical entrepreneurs can bring in a larger firm.

Book Club: Chapter 6 The Innovator’s DNA: Experimenting

Written by Theresa Shafer. Posted in Books, Events

Recorded discussion on Jeff Dyer, Hal Gregersen, Clayton M. Christensen’s The Innovator’s DNA chapter 6, recorded on June 20, 2012. Michael Fern and Edith Harbaugh join Steve Hogan and Sean Murphy to discuss lessons learned experimenting to foster innovation.

Chapter 6:

Discovery Skill #5 Experimenting

The Innovator’s DNA

by Jeff Dyer, Hal Gregersen, Clayton M. Christensen

Practical and provocative, The Innovator’s DNA is an essential resource for individuals and teams who want to strengthen their innovative prowess.

The authors outline five discovery skills that distinguish innovative entrepreneurs and executives from ordinary managers: Associating, Questioning, Observing, Networking, and Experimenting.

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Related Resources:

The Innovator’s DNA overview

Discovery Skills

  1. Associating
  2. Questioning
  3. Observing
  4. Networking
  5. Experimenting

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Additional Book Reviews

Managing Oneself Article
Boyd-OODA The Lean Startup
Moore's Darwin and the Demon HRB article
Cohan Great Demo
Origin and Evolution

Tristan Kromer Joins Book Club’s Panel on Networking Skill Development

Written by Sean Murphy. Posted in Books, Events

We continue our review of “The Innovator’s DNA” by Jeff Dyer, Hal Gregersen, Clayton M. Christensen with a focus on networking, which the author’s define as seeking serious conversation with individuals from diverse backgrounds, experiences, and expertise.  Here is a  quote by Ronald Burt on creativity from idea brokerage  (condensed from page 117):

“People connected to groups beyond their own have early access to diverse, often contradictory information and interpretations, which gives them competitive advantage in seeing and developing good ideas. This is creativity as an import-export business. A idea mundane in one group can be a valuable insight in another.”

What: Book Club for Business Impact covers Innovator’s DNA Skill #4 Networking
When : Wednesday May 16 Noon to 1pm PST / 3-4PM EST / 8PM London / 9PM Paris & Berlin / May 17 7AM Sydney
Where : on-line https://vimeo.com/42297558
Cost: No charge for live event

Tristan Kromer, Steve Hogan and I will be discussing the book and specifically Chapter 5 on networking. This is intended to be a roundtable conversation and we will take questions and comments from the audience via the chat interface throughout the event. You can use the GotoMeeting client or dial in from the US, Europe, or Australia.

Tristan (@TriKro) brings unique background and set of experiences to the panel. He has lived in 12 cities spread across five countries, he worked or ten years in the music industry, five years in IT security, and has becoming actively involved advising a number of startups as well as launching of his own. He blogs at grasshopperherder.com.

The word networking can conjure up a number of obnoxious business practices. For the purposes of the discussion there are a couple of situations that we will take as points of departure:

  • You may very well be looking for new information that’s outside your box, it’s likely inside of someones else’s. Many successful innovative products rely less on the discovery of genuinely new information and more on the combination of knowledge from seemingly unrelated fields or industries.
  • There is a category of information that’s not written down (yet, and perhaps never). You place your startup at a tremendous disadvantage if you focus on learning solely from reading or what you can directly observe. Someone else’s experiences and expertise can often supply missing pieces of the product market fit puzzle.
  • Networking in a mature firm tends to be ends focused: you have a specific destination in mind and are looking for insights and resources to accomplish a pre-existing goal. This leads to interpersonal networking strategies that are more transactional. Networking in a startup is often driven by a search for means and building blocks, it’s as much about gaining multiple perspective on your current situation and weaving a network  that you can continue to collaborate with as it is a single transaction.
  • One of the largest barriers to effective networking is your own experience; like a fish in water it can be hard to understand how to build a common context for a conversation.

Book Club: Chapter 5 – The Innovator’S DNA

Written by Theresa Shafer. Posted in Books, Events

Call-in Book Review recorded on May 16, 2012
Tristan Kromer, Steve Hogan and Sean Murphy discuss the book and specifically Chapter 5 on networking.

Chapter 5:

Discovery Skill #4 Networking

The Innovator’s DNA

by Jeff Dyer, Hal Gregersen, Clayton M. Christensen

Practical and provocative, The Innovator’s DNA is an essential resource for individuals and teams who want to strengthen their innovative prowess.

The authors outline five discovery skills that distinguish innovative entrepreneurs and executives from ordinary managers: Associating, Questioning, Observing, Networking, and Experimenting.

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Related Resources:

The Innovator’s DNA overview

Discovery Skills

  1. Associating
  2. Questioning
  3. Observing
  4. Networking
  5. Experimenting

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Additional Book Reviews

Managing Oneself Article
Boyd-OODA The Lean Startup
Moore's Darwin and the Demon HRB article
Cohan Great Demo
Origin and Evolution

Seth Godin “Trust Is Even More Scarce Than Attention”

Written by Sean Murphy. Posted in Rules of Thumb

Here are my top seven from Seth Godin’s list of 21 ways to make money online. (original numbering preserved).

3. Get rich slow. [link added]

Slow means that you are not impatient and don’t cut corners. It also means you are confident

4. Focus on the scarce resource online: attention. If you try to invent a way to take cheap attention and turn it into cash, you will fail. The attention you want isn’t cheap, it’s difficult to get via SEO and it rarely scales. Instead, figure out how to earn expensive attention.

5. In addition to attention, focus on trust. Trust is even more scarce than attention.

Trust doesn’t scale, it’s built up by repeated interactions over time. That’s what makes it so important.

7. Don’t quit your day job. Start evenings and weekends and figure it out with small failures.

Having a plan for taking affordable losses means that you can play the game longer and learn more.

9. Obsessively specialize. No niche is too small if it’s yours.

15. Hang out with people who aren’t looking for shortcuts. Learn from them.

I am always looking for way to be more productive but I expect it will take a lot of hard work just to maintain the status quo.

17. Make money in the small and then relentlessly scale.

I like this list, it incorporates his premise that permission leads to attention, and attention leads to trust when the communication is personal, anticipated, and relevant.

Three Tips from Sid Faulkner For Preparing To Sell Your Startup

Written by Sean Murphy. Posted in skmurphy

Sid Faulkner, CFO of Ciranova gave a talk today on “Navigating the Treacherous Path of Mergers and Acquisitions” at an event at Abbot Stringham and Lynch. Mr. Faulkner was Vice President and Chief Financial Officer of Oak Technology, Inc. where he led the 1995 initial and secondary public stock offerings, established an active program of intellectual property protection, and participated in the acquisition of four companies. He was also CFO at Altos Design Automation when they were acquired by Cadence, CFO at Gemini Design Automation when they were acquired by Synopsys, and CFO at Auto ESL when they were acquired by Xilinx.

Here are three tips that I took away that are most applicable to bootstrappers:

  • Complex Roller Coaster Ride: Every M&A transaction will have negotiations, due diligence, plenty of work, and an emotional roller coaster. It may take anywhere from three weeks to six months to close a deal, after you have a term sheet. Avoid “We won the term sheet, they won the documents,” make sure that term sheet agreement is reflected in final deal documents.
  • There is Something About a Closet That Makes a Skeleton Restless: word of a deal will encourage competitors to press you harder,  suppliers to negotiate harder, unhappy employees to renegotiate compensation. Settle lawsuits, clean up the capitalization table and all stock and option agreements, and make sure intellectual property assignment, offer letters, employment agreements, and any termination agreements are all signed and filed before you start to shop the company.
  • You Know Your Customers Love You But Can You Prove It? Can You Quantify Their Love? Keep contracts, license agreements, purchase orders, invoices, and any and all revenue recognition policies and decisions documented and well organized. It’s better to maintain them as a part of an ongoing effort than try to pick up the slack during a due diligence cycle.

Update May 9: Carol Wagner, who moderated the panel, has posted her thoughts key take aways on “Mergers and Acquisitions: Your Price and Your People

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