Q: Should I tap my 401K to bootstrap my startup? I had a conversation with the CEO of another firm and he and his partners did this to bootstrap. They started a C corporation and set up a corporate retirement account, the partners then rolled existing retirement accounts into the corporate plan and invested the money in the company’s stock. I did a little research and found these articles:
This is a webinar replay that was recorded on Wednesday, June 8, 2011 with Massimo Paolini, Miles Kehoe, Dorai Thodla, and Sean Murphy discussing Barry Moltz‘s “You Need to Be a Little Crazy: The Truth about Starting and Growing Your Business.” They share how they personally found the courage to start their businesses and their desire to make “working for yourself” mean not only a better job but building equity.
Here is my summer reading list for entrepreneurs, 2015 edition. These six books cover a range of topics: sales and marketing, skills for innovation, cultivating expertise, giving and getting advice, pursuing mastery, and mapping the value chain for a new product.
Theodore Zeldin gave a series of six lectures on conversation that were collected in slim book called “Conversation: How Talk Can Change Our Lives.” I found it offered a number of insights on what is needed for a serious conversation. And since serious conversation is one of the primary tools for early market exploration and customer development; I have curated a list of nine excerpts I think entrepreneurs will find useful.
Some quotes from “Whispers Under Ground“, “Broken Homes“, and “Foxglove Summer.” They are the third, fourth, and fifth novels in Ben Aaronovitch’s “Rivers of London” series of novels about Peter Grant, a London Police Constable and apprentice magician.
I bought these three on the strength of his first book I had the feeling that Aaronovitch succumbed to “Game of Thrones” disease–not greyscale but “literary elephantiasis”–where he is afraid to bring anything to a conclusion because his series has become so popular–and profitable.
Rivers of London by Ben Aaronovitch infuses magic into the police procedural. The narrator is Peter Grant, a young London Metropolitan Police Constable newly apprenticed to a wizard. It’s a strangely compelling read that I could not put down until I finished it.
The novel is deeply rooted in the day to day realities of policing modern London and offers humor and a number of twists. Because the narrator is only an apprentice magician he understands some of the hows for performing magic but little of the why so he is conducting three investigations in parallel: the first is to understand not just the surface skills needed for magic but the real mechanisms for spooky action at a distance, the second is to find a way to resolve a dispute between a number of powerful river spirits, and the third is to uncover the real culprit behind a series of assaults and murders.
Michael Fern, Edith Harbaugh, Steve Hogan, and Sean Murphy discuss the Innovator’s DNA experimenting skill.
Tristan Kromer joins Steve Hogan and Sean Murphy to discuss networking as a key skill to develop to foster innovation.
Sarah Gray, Ethan Thorman, and Mark Cook join Steve Hogan and Sean Murphy to discuss lessons learned asking questions to foster innovation.
Panel sessions Feb 22, 2012 on Innovator’s DNA Skill #1 Associating. Terry Frazier of Cognovis, Steve Hogan of Tech-Rx, and Sean Murphy of SKMurphy.
Steve Hogan and Sean Murphy walk through a five part webinar series on “The Innovator’s DNA” by Jeff Dyer, Hal Gregersen,and Clayton Christensen. Sean thinks it’s the best book on innovation and entrepreneurship for 2011 and useful for any team that is trying to innovate. Each webinar will be in a roundtable format and include first time entrepreneurs and experienced innovators discussing lessons learned applying the five key discovery skills described in the book.
I have started to reserve Sundays to write on spirituality, charity, and a higher moral purpose to our life as entrepreneurs. I was struck by the quote that Stephenson puts in Juanita’s mouth in Snow Crash and have concluded that he is performing a similar ministry in his science fiction writing. There is a sense of wonder and meditation on “some power like grace, like the Force, or Providence, or what-have-you, that had been at work in the world today” (from Zula’s reflection on the events of Reamde)
Q: Can you please take a look at this pitch. I have created it as a promo for investors and potential users.
Selling your offering to customers and selling your business to investors requires two different presentations They have fundamentally different questions they need answered before they “buy.”
Customers want to understand how your product will meet their needs. Investors want to know how much their investment will return and why: they may want to understand your customer presentation but only if you cannot offer strong evidence of traction: revenue, signups, etc…They are always interested in what you have learned and what you plan to learn: what hypothesis you need to test using their money.
In B2B markets early business customers may be interested in your investment pitch if they believe you will need investment to be viable but that is rarely the case in a consumer market.
The major components of an elevator pitch are traction, product, team, and social proof. And investors care about traction over everything else. A story without traction is a work of fiction.
Traction is a measure of your product’s engagement with its market, a.k.a. product/market fit. In order of importance, it is demonstrated through:
- pilot customers
- non-paying users
- verified hypotheses about customer problems.
And their rates of change.
Pitching Hacks is a slim 83 page book that packs a lot of insight. Many longer books have a good 4-5 page magazine article trapped inside, this book has already been boiled to the essentials. Definitely worth $20 if you are wiling to follow at least one of the many pieces of advice in the book.
You can follow @skmurphy to get these hot off the mojo wire or wait until these quotes for entrepreneurs are collected in a blog post at the end of each month. Enter your E-mail address if you would like have new blog posts sent to you.
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“There is no distance on this Earth as far away as yesterday.”
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“Talent hits a target no one else can hit; genius hits a target no one else can see.”
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“The shrewd guess, the fertile hypothesis, the courageous leap to a tentative conclusion–these are the most valuable coin of the thinker at work. But in most schools guessing is heavily penalized and is associated somehow with laziness.”
Jerome S. Bruner
I used this as the closing quote for “Early Markets Offer Fluid Opportunities”
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“Good design successfully manages the tensions between user needs, technology feasibility, and business viability.”
From an interview in “Imagine Design Create”
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“The secret to success is constancy of purpose”
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“The right way to build a company is to experiment in lots of small ways, so that you have plenty of room to make mistakes and change strategies.”
Vinod Khosla quoted in “What Does Vinod Khosla Know About Web 2.0 That Others Don’t?” (2005)
Used as closing quote in “Making Our Business More Credible in 2006”
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“A reputation for good judgment, for fair dealing, for truth, and for rectitude, is itself a fortune.”
Henry Ward Beecher
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“Don’t save the canary. Fix the coal mine.”
Seth Godin in “Canaries and Coal Mines“
This is not the best line in the blog post, it’s “My own little Potemkin Village” which highlights Godin’s insight into the perils of celebrity.
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“Innovation is fostered by information gathered from new connections; from insights gained by journeys into other disciplines or places; from active, collegial networks and fluid, open boundaries. Innovation arises from ongoing circles of exchange, where information is not just accumulated or stored, but created. Knowledge is generated anew from connections that weren’t there before.”
Margaret J. Wheatley
h/t Valeria Maltoni
Used as closing quote in “Byron Wien’s Lessons Learned in 80 Years: Seven for Entrepreneurs.”
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“Before you can score you must have a goal.”
Used as the title for “Before you can score you must have a goal.”
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The days you work are the best days.
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“Nothing happens to you that has not happened to someone else.”
I really liked William Feather’s 1949 book, “The Business of Life.” It’s a collection of short notes, letters, newspaper columns magazine articles. Very insightful, and something like reading a blog from the 1930?s and 40?s. I used it as the basis for four blog posts:
- “William Feather’s ‘The Business of Life’“
- “More from William Feather’s ‘The Business of Life’“
- “William Feather on Perseverance Rewarded“
- “William Feather on ‘Dead Business’“
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“I like breakfast-time better than any other moment in the day,” said Mr. Irwine. “No dust has settled on one’s mind then, and it presents a clear mirror to the rays of things”.
George Eliot in Adam Bede (1859)
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“When you struggle to reach for something you don’t know, that’s where most of the interesting stuff is.”
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“Expect nothing. Live frugally on surprise.”
Added as part of a July 2013 postscript to “Good Fortune.”
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“Look around. Find the stories that are the ones that one day, you’re going to wish somebody had told sooner. Tell them.”
Scott Rosenberg (@scottros) in Missed stories: About that Horace Mann School article in the Times
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Used as the closing quote for “Christopher Moore’s Coyote Blue.”
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“Sometimes when you start losing detail, whether it’s in music or in life, something as small as failing to be polite, you start to lose substance.”
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“To select well among old things is almost equal to inventing new ones.”
Nicolas Charles Joseph Trublet
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“What is the quality of your intent? Certain people have a way of saying things that shake us to the core. Even when the words do not seem harsh or offensive, the impact is shattering. What we could be experiencing is the intent behind the words.”
Used as the opening quote for “Advising Entrepreneurs”
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“It is too late now for earlier ways;
now there are only some other ways,
and only one way to find them–fail.”
William Stafford excerpt from “Level Light”
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“The point of a notebook is to jumpstart the mind.”
John Gregory Dunne
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“One startup’s earlyvangelist is another enterprise’s intrapreneur.”
It’s taken me a while to recognize this duality. I think “change agent” is an equally useful term for intrapreneur.
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“There is a difference between knowing a thing and understanding it.
You can know a lot about something and not really understand it.”
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“I try to do the right thing at the right time. They may be just little things, but they usually make the difference between winning and losing.”
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Great advice. I used this quote in “Christopher Moore’s Coyote Blue.”
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“True deception goes unnoticed.”
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“‘Fortune favors the bold,’ but only if they are playing a game they thoroughly know.”
I think Grafe adds a useful qualification to Virgil‘s “Fortune favors the bold.” (line 284 of Book 10 of the Aeneid: “Audentes fortuna juvat.”)
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The need to be right all the time is the biggest bar to new ideas.”
Edward de Bono
h/t Jabe Bloom (@cyetain)
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“Try to be one on whom nothing is lost.”
From his essay “The Art of Fiction” James advises:
The power to guess the unseen from the seen, to trace the implication of things, to judge the whole piece by the pattern, the condition of feeling life in general so completely that you are well on your way to knowing any particular corner of it–this cluster of gifts may almost be said to constitute experience. […]I should certainly say to a novice, “Write from experience and experience only” […] and “Try to be one of those people on whom nothing is lost.”
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In his author’s note he writes:
Do you ever get the feeling that forces unseen are messing with your life? Yeah, me too. And there is little doubt that those forces are driven by the greatest force in the universe — irony, right? Right?
So imagine my surprise when, some years ago, while I was researching a book on demons, I kept running across references to tricksters, and one trickster in particular, the trickster god Coyote. I thought, Heres a god whose main function seems to be acting as an agent of irony — the special prosecutor of Murphy’s Law, if you will. And, I figured, if ever there was a time during which the god of irony seemed to be testing his powers that time would be now.
What entrepreneur has not been at least indicted by the “special prosecutor for Murphy’s Law?”
Here are a few excerpts
“When everything is right with you, but you are so worried that something might go wrong that it ruins your balance, then you are Coyote Blue.”
Those of us with a firm grasp of contingencies are familiar with the uneasy feeling that “things are going too well, I must have overlooked something.” Startups are often well served by having at least one member of the team with this attitude, although–like cayenne pepper or wasabe–a pinch or two is often enough to season an elephant’s worth of stew.
“There are those who, deprived of physical beauty, develop a sincerity and beauty of spirit that seems to eclipse their appearance. They marry for love, stay married, and raise happy children who are quick to laugh and slow to judge.”
Good advice for many technical entrepreneurs and–in hindsight–my plan of record as well.
“Before the television arrived Samson did not know he was poor. Now he spent every evening piled in the front room with his family watching people he did not know do things he did not understand in places he could not fathom, while the commercials told him he could be just like those people.”
I gave up my television a few years ago and was surprised at how much more time that I had. Last month I spent two days in bed in a room with a television and after I finished the book I had brought with me, “No Way In” by Richard Fernandez, I spent an hour or two getting re-acquainted with how Samson feels in this passage. Many firms appear to be hard at work to port this same experience to the web. More’s the pity.
“The ostentation of the casinos did not create a desire for money; it made money meaningless. There were no mortgages in a casino, no children needing food, no car needing repairs, no work, no time, no day, no night; those things–the context of money–were someplace else. A place where people returned before they realized that a turd rolled in rhinestones is a turd nonetheless.”
Other web firms are hard at work to bring this experience to the web. Please apply your talents to another problem.
“He followed the signs down the surface streets lined with pawnshops, convenience stores, and low-slung cinder-block buildings under neon signs that proclaimed, CASH FOR YOUR CAR, CHECKS CASHED HERE, MARRIAGES AND DIVORCES–TWENTY-FOUR-HOUR DRIVE-THRU WINDOW.
Coyote said, “What are these places?”
Sam tried to think of a quick explanation, but was too weary from lack of sleep to tackle the concept of Las Vegas in twenty-five words or less. Finally he said, “These are places where you go if you want to fuck up your life and you don’t have a lot of time to do it in.”
“Are we going to stop?”
“No, I seem to be fucking up at a fine rate of speed, thank you.”
Bootstrappers often feel this conflicted when they think about reaching out to a venture capital firm.
“That’s the scary thing about hope, if you let it go too long it turns into faith.”
In the end making the leap to an entrepreneurial venture is hope that persists into a leap to faith.
- The Wide Lens by Ron Adner is insightful, practical, and offers recent examples
- The End of Competition by James F. Moore provides a good theoretical framework but now two decades old; he clearly saw it coming. His HBR article provides 80% of the insights and is worth reading first: Predator and Prey a New Ecology of Competition
- Bionomics: Economy as Ecosystem by Michael Rothschild is from 1990 but still very much worth reading. Combines information theory, energy models, and biological metaphors to offer real insights.
One peculiarity of this age is the sudden acquisition of much physical knowledge. There is scarcely a department of science or art which is the same, or at all the same, as it was fifty years ago. A new world of inventions—of railways and of telegraphs—has grown up around us which we cannot help seeing; a new world of ideas is in the air and affects us, though we do not see it.
Writing in 1872 Bagehot sees a rapid transformation of the arts and sciences by new transport and communications technologies. I think too often we think of the Internet, or the integrated circuit as the kickoff for accelerating progress. But writing 140 years ago Bagehot witnessed the changes that the telegraph (e.g. first telegram had sent by transatlantic cable in 1858) and the steam engine had wrought.
From the last paragraph of the second chapter “The Use of Conflict”
The military habit makes man think far too much of definite action, and far too little of brooding meditation. Life is not a set campaign, but an irregular work, and the main forces in it are not overt resolutions, but latent and half-involuntary promptings. The mistake of military ethics is to exaggerate the conception of discipline, and so to present the moral force of the will in a barer form than it ever ought to take. Military morals can direct the axe to cut down the tree, but it knows nothing of the quiet force by which the forest grows.
As entrepreneurs we value self-discipline (if only in the ability to chart our own course), fast decision making, and bold action. But, as Bagehot argues, there is also value in thoughtful reflection, quiet exploration and experimentation, and slower but more deliberate decision making.
It’s an interesting book that traces the need for a robust military to enable any society–especially an early or primitive society–to survive against the depredations of neighboring societies. But Bagehot is clear on the need for cooperation and collaboration for any one individual to survive much less thrive. An excerpt from the final chapter “Verifiable Progress Politically Considered”
The progress of MAN requires the co—operation of MEN for its development. That which any one man or any one family could invent for themselves is obviously exceedingly limited. And even if this were not true, isolated progress could never be traced. The rudest sort of cooperative society, the lowest tribe and the feeblest government, is so much stronger than isolated man, that isolated man (if he ever existed in any shape which could be called man), might very easily have ceased to exist. The first principle of the subject is that man can only progress in ‘co-operative groups;’ I might say tribes and nations, but I use the less common word because few people would at once see that tribes and nations ARE co-operative groups, and that it is their being so which makes their value; that unless you can make a strong co-operative bond, your society will be conquered and killed out by some other society which has such a bond; and the second principle is that the members of such a group should be similar enough to one another to co-operate easily and readily together.