Posts filed under 'Books'
February 6th, 2010
This is a start articulating a set of resources that are for the most part not yet part of entrepreneurial thinking but that have had a significant impact on my perspective. I welcome any suggestions or lists from readers for what has influenced you, and opened you to new perspectives on your entrepreneurial journey.
What follows are my two year old answers, in no particular order to a question on Hacker News: Articles, Ideas, Books and/or Concepts that have changed your life.
I developed the list thinking about my approach to business and entrepreneurship, which is narrower than “life” and accounts for a lack of spiritual, marital, self-mastery, and personal improvement books and ideas.
- Myers-Briggs Model for Personality
- “Four Steps to the Epiphany” by Steve Blank
- John Boyd’s OODA Loop as a model for competitive decision making
- Decision Analysis techniques: in particular decision trees, expected value of perfect information, and “good decision, bad outcome.”
- BATNA (best alternative to a negotiated agreement) concept for negotiation planning
- “Secrets of Consulting” by Gerald M. Weinberg
- “Bionomics: Economy as Ecosystem” by Michael Rothschild
- SimCity computer game
- Analysis of Competing Hypotheses methodology
- wiki (social process) model for small team collaborative document development
- community of practice model for knowledge management
- “The Moon is a Harsh Mistress” by Robert Heinlein (in particular TANSTAAFL)
- activation energy, catalyst, and phase change concepts from physics/chemistry
- Amplify Positive Deviance model from Jerry Sternin (Save the Children)
- “The Empowered Manager” by Peter Block, in particular his trust vs. agreement matrix
- “Crossing the Chasm” & “Inside the Tornado” by Geoffrey Moore
- “Maneuver Warfare Handbook” by William Lind
- “Change Your Brain, Change Your Life” by Daniel Amen
- “Micromotives and Macrobehavior” by Thomas Schelling
- Appreciative Inquiry Techniques
Here are a few more techniques or perspectives that I have added upon some further reflection.
- Russell Ackoff’s Decision Record Model
- Gary Klein’s Premortem Technique
- Saras Sarasvathy’s Effectual Reasoning Model from What Makes Entrepreneurs Entrepreneurial
- Andrew Grove’s “High Output Management” in particular “always review drafts” and his model for one on one meetings.
- “Computers, Networks, and the Corporation” by Tom Malone and John F. Rockhart (1991 Scientific American Article)
- “The Computer and the Dynamo: The Modern Productivity Paradox in a Not Too Distant Mirror” Paul David (1989)
- “Gunfire at Sea” Elton Morison
- “Persistent Forecasting of Disruptive Technologies” by National Research Council (2010)
- “Technology Singularity” by Vernor Vinge, in particular the “Intelligence Amplification” section
December 15th, 2009
Q: Does anyone have a customer interview script that they use? What is the focus of the interview and can some of that interaction be replaced by really evaluating analytics (for web based enterprises)?
This question came up on the Learn Startup Circle List recently and I took the time to answer it.
I think the “Appreciative Inquiry” model offers a very effective model for early customer interviews. At a high level it’s
- “What problems are you having?”
- “What’s working around here?”
You need to focus on their pain and problems but build on their strengths. While there is a whole methodology/discipline you can follow at the Appreciative Inquiry Commons with “What is Appreciative Inquiry” a good place to start, I found the “Thin Book of Appreciative Inquiry” to be $8 and two hours well spent. It’s only 63 pages long but I found myself stopping several times and realizing I needed to change what I had been doing.
The “Amplify Positive Deviance” model developed by Jerry Sternin is another useful one to determine what the real status quo is for a category of prospect. Here are two good sources of information
I have transcribed the 7 steps in the “Positive Deviant” article and added a customer development interpretation for some of them in parentheses.
- Don’t assume you have the answer (treat your approach as a hypothesis to be validated, updated, or refuted)
- Interview folks in settings where they are most likely to be forthcoming
- Encourage small steps using a new approach/tool/technology (get simple product in customers hands)
- Identify current status quo
- …and how positive deviants depart from it (different between early adopters and pragmatic/late majority)
- let deviants get others to adopt new tools / techniques (customers / word of mouth is most effective sales technique)
- Track results, keep score (add clear ROI to anecdotes from early adopters)
Sorry if this is too theoretical, but I think it’s more about a mindset or frame of reference you bring to the conversation than a particular script or set of questions. Here are five related blog posts about early customer interviews:
October 6th, 2009
I continue to run into folks who find themselves encouraged to launching a consulting career by their former employer and what is proving to be a very deep recession. Here are three books I recommend to them to help get some perspective on the career they now find themselves in.
I have a related blog post from October of last year on “Customer Development for a Consulting Practice in a Downturn” and another one from July of 2007 on “Networking in Silicon Valley” that is still accurate.
September 29th, 2009
Fora.tv did a nice video of my Wed-Sep-16 talk at SF Bay ACM on “The Limits of I’lll Know it When I See it.” Here are the slides in PDF format (see below for an outline with hyperlinks to references).
The talk was well received and garnered the following comments on the feedback forms.
- “Nice distillation of fundamentals in applying expertise effectively.”
- “interesting ideas”
- “a bit too fast, would appreciate a list of references.”
- “Learned about new authors to check out, learned about new methods to work on teams.”
- “References are Appreciated”
- “Very Good Event!!”
Outline for The Limits of “I’ll Know It When I See It” Wednesday, Sep-16-2009 at San Francisco Bay ACM Chapter
- Overview
- Individual Expertise
- Effective Delegation
- Blending Expertise In a Team
- Questions for Audience: Role
- Individual Contributor
- Manager / Project Manager
- Consultant
- Solo Entrepreneur
- Startup Founding Team
- Questions for Audience: Discipline
- Engineering
- Sales & Marketing
- Finance & Operations
- Executive Management
- Individual Expertise
- I’ll Know It When I See It
- Unconscious Competence
- Not Available To Introspection
- “I’ll Know It When I See It” Examples
- Reading A Pap Smear
- A Gestalt: Whole Is More Than Sum Of Parts
- A Detail You See That Is Often Overlooked
- What is Expertise?
- “Experts 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.”
- Source: Gary Klein “Sources of Power“
- Example Of Expertise: Physician
- Elicit Symptoms (May Include Tests)
- Offer a Diagnosis (Root Cause Analysis)
- Explain Differentials (Sensitivity Analysis)
- Suggest a Prescription (Course of Action)
- Outline Prognosis (Likely Outcomes)
- Use Outcomes to Refine Rules & Models
- Expertise: Personal Mastery
- Master Not Only The Technical
- But Also Emotional Aspects Of a Problem
- Self-Debugging
- Deliberate Practice
- Predict Outcomes of a Decision & Follow-Up
- 10,000 Hour Rule (Ericsson)
- Experts Have Confidence to Proceed: “They Can Because They Think They Can” Virgil
- Expertise: Holistic Intuition
- Unconscious Competence
- Pattern Recognition
- Muscle Memory
- Backtracking & Self-Evaluation
- What’s The Difference Between
- Talented Contributor & Effective Manager
- Solo Entrepreneur & Entrepreneurial CEO
- Answer: Effective Delegation
- Two Types of Delegation
- Crystallize & Codify
- Form A Small Team With A Shared Mission
- Crystallize & Codify
- Externalize Insights
- Formalize Approach
- Thought Process Available For Evaluation
- Basis for Self-Improvement
- Defined and Repeatable Process
- Approaches To Crystallize & Codify
- Sketch A Drawing
- Run A Google Search
- Craft A Metaphor (e.g. Computer Virus)
- Write A Program To Solve Part Of Problem
- Build A Spreadsheet
- Examples of Crystallize & Codify
- Rules Of Thumb
- Checklists
- Recipes
- Model or Simulation
- Now That It’s Out Of Your Head
- You Can Have Conversations
- Solicit Suggestions For Improvement
- Compare Notes With Other Experts
- Refine Based On Broader Experience
- Questions For Audience: Crystallize
- How Do You Capture Your Expertise?
- I Will Jot Or Sketch On a 3×5 Card
- Anyone Want to Offer an Example?
- Recap: The Difference Between
- Talented Contributor & Effective Manager
- Solo Entrepreneur & Entrepreneurial CEO
- Answer: Effective Delegation
- Two Types of Delegation
Crystallize & Codify- Form A Small Team With A Shared Mission
- Keys To Forming A Small Team
- A Common Mission or Desired End
- Metrics For Measuring Progress
- Shared Situational Awareness
- Each Member Can Link Actions to Goals
- Limit of “I’ll Know It When I See It”
- Problem Grows Bigger Than One Person
- You Need a Team
- Often With Several Experts
- Product Team Example
- One Table / Two-Pizza Meeting
- Need Different Engineering Experts
- Power, Mechanical, Software,
- Engineering Is About Trade-offs
- Cost, Performance, Development Time
- Individual Expertise vs. Team Decision Making
- Two Key Differences
- Trust
- Shared Situational Awareness
- New Challenge: Blending Expertise On A Team
- Models That Blend Expertise For Team Decision Making
- Recognition Primed Decisions – Klein
- Principles of Maneuver Warfare – Lind
- Decision Tree Model – Howard
- Analysis of Competing Hypotheses – Heuer
- Recognition Primed Decision
- Useful in Emergencies and Crises
- Depth-First Search of Possibilities
- Agree On a Model of Situation
- Generate Possible Courses of Action
- Select First One That Works
- Source: Klein “Sources of Power” & “Intuition“
- Principles of Maneuver Warfare
- Useful For Rapid Decision Making
- One Mission / One Main Effort
- Push Decisions Down (Close to Facts)
- Reconnaissance Pull: Guided By Facts
- Source: Lind “Principles of Maneuver Warfare“
- Decision Tree Model
- Used to Organize Sequence of Decisions
- Helps Bound Uncertainty
- Identify Choices and Probable Outcomes
- Each Outcome In Term has New Choices
- Example: Fault & Diagnostic Trees
- Source: Howard “Decision Analysis” (See also Howard’s papers)
- Analysis of Competing Hypotheses
- Offers Clarity on Facts & Key Hypotheses
- Avoids “A vs. B” Thinking; More Options
- Make a Table
- Hypotheses In Columns, Facts in Rows
- Cell: Fact Supports, Contradicts, or No Effect
- Shifts Focus to Getting New Facts
- Source: Heuer “Psychology of Intelligence Analysis“
- Improving Team Decisions
- Gary Klein’s Pre-Mortem Technique (See “Performing a Project Premortem“)
- Assume Project Has Failed
- Identify Possible Sources of Failure
- Add Risk Mitigation Efforts to Address
- Russell Ackoff s Decision Record (see Chapter 21 of “Ackoff’s Best“)
- Each Participant Writes Down Separately
- Reasons for Decision, Likely Outcome(s).
- Review As Impacts Become Clear
- Recap: Limits of “I’ll Know It When I See It?”
- Moving Beyond Personal Expertise
- Two Types of Delegation
- Crystallize & Codify
- Form A Small Team With A Shared Mission
- Effective Teams Have Many Experts
- Requires Clarity on Facts and Hypotheses
- SKMurphy - What We Do
- We Offer Customer Development Services
- New Technology Introduction
- Focus: Early Customers & Early Revenue
- We Assist On Strategic Decisions
- Niche Identification and Selection
- Pricing
- Negotiation Sequence and Framework
- Please Turn In Evaluations
- Help Us Improve The Recipe for This Talk
February 26th, 2009
Although it’s aimed at startup entrepreneurs who are seeking investment, the Pitching Hacks e-book from the Venture Hacks team has $20* of advice for bootstrappers as well.
Investors don’t invest in businesses. They invest in stories about businesses.
If you want to raise money on favorable terms, you need multiple investment o?ers. How do you get multiple o?ers? Tell a good story to several investors at the same time. A good story can’t sell a pile of garbage, but it will keep a gem from going unnoticed.
You can tell a story in a sentence;
you can tell a story in a paragraph;
and you can tell a story in a 20-minute pitch.
Startups need to do all three.
The importance of boiling your story down to a sentence and a paragraph as well as 20 minute presentation is hard to under-emphasize.
The major components of an elevator pitch are traction, product, team, and social proof. And investors care about traction over everything else.
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:
- profit
- revenue
- customers
- pilot customers
- non-paying users
- verified hypotheses about customer problems.
And their rates of change.
These are also very good markers for your progress in bootstrapping a company
A story without traction is a work of fiction.
This is especially true of the stories that entrepreneurs tell themselves and the team’s perception of their progress. We cover this in our “Idea to Revenue” workshop, defining traction as “the ability to set and hit targets.” We divide this into internal and external traction. Where internal traction involves the ability to make decisions, to define and deliver to a specification on a schedule and get others excited enough to join the team. External traction is the ability to meet the commitments you make to customers and is measured by revenue and references.
They also encourage the very early engagement with the market that’s also required of bootstrapping.
Put your idea on a piece of paper and start testing it with customers: “Does this solve your problem? How much would you pay for it?”
It’s a slim 83 page book that packs a lot of insight into each section. Many longer books have a good 4-5 page magazine article trapped inside, this book has already been boiled to the essentials. It’s a nice complement to the wealth of information on the Venture Hacks blog. Definitely worth $20 if you are wiling to follow at least one of the many pieces of advice in the book.
*Pitching Hacks, now with 25% more value! Bootstrappers are advised to save $5 by using the “PITCHINGROCKS” discount code.
January 25th, 2009
Another excerpt from William Feather’s “Business of Life”
Dead Business
A neighboring grocery store went bankrupt, and a bookkeeper who was called in by the lawyers to help inventory the bankrupt stock says he never before realized the difference between a dead business and a going concern.
Here were cheese and vegetables and meat, he found, which would have been salable the next day if the store had kept open. Here were accounts with nearby customers which might have been paid by the next payday, but now would have to be turned over to a collection agency. Here were canned goods which could have gone to make up the weekday meals of a hundred families, but now would have to be sacrificed as “bankrupt stock.” No one who has not helped to salvage a disordered store and turn odds and ends into cash at a quick sale can realize how much it shrinks in value.
Every business accumulates a friendliness on the part of the customers which becomes part of its stock in trade. The habit of stopping at a certain store to buy, or the familiarity which leads one to ask for an advertised brand of anything, forms an asset as important as building and fixtures. It is this fact which enables companies about to issue stock for public sale to place a large value on their good will and to issue stock for its full amount. The money which has been invested in years of careful advertising builds up a fund of good will solid enough so that bankers lend money on it–when they lend money on anything.
My copy of “Thoughts on the Business of Life” is copyright 1949 with individual articles copyrighted between 1927 and 1949, so I can only limit the date of this article to between 1927 and 1949. It’s certainly still applicable today, and applicable to knowledge businesses a much as retail firms.
Entrepreneurs who are facing the challenges of closing a deal with their first few customers can be surprised how hard it is to get on prospect’s calendars and get them to return calls. Problems that will be an order of magnitude easier to manage once the prospects become customers. Established credit relationships with suppliers, partners, and customers can also take a long time to establish and are equally valuable.
As you consider how to get through the recession of 2009 (or what I hope will be called the recession of 2009, instead of the recession of 2009-2010) Feather’s observations from perhaps 80 years ago are well worth bearing in mind. Find a way to continue to operate, even if in a reduced fashion, as a set of ongoing customer and supplier relationships have considerable value and act as a force multiplier on your other assets.
I close with two related quotes on reciprocal obligations from Margaret Atwood’s essay “A Matter of Life and Debt”
Debt–who owes what to whom, or to what, and how that debt gets paid–is a subject much larger than money. It has to do with our basic sense of fairness, a sense that is embedded in all of our exchanges with our fellow human beings.
We are social creatures who must interact for mutual benefit, and–the negative version–who harbor grudges when we feel we’ve been treated unfairly. Without a sense of fairness and also a level of trust, without a system of reciprocal altruism and tit-for-tat–one good turn deserves another, and so does one bad turn–no one would ever lend anything, as there would be no expectation of being paid back. And people would lie, cheat and steal with abandon, as there would be no punishments for such behavior.
Here are some earlier blog posts that include excerpts from William Feather’s “The Business of Life.”
January 18th, 2009
After thinking some more about yesterday’s post on entrepreneurial motivation I thought I would re-read some Peter Drucker, his clarity and prescience continue to impress me. All of these quotes are from Chapter 6 “What is a Business” in “Management: Tasks, Responsibilities, and Practices”
There is only one definition of business purpose: to create a customer.
It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods.
The typical engineering definition of quality is something that is hard to do, is complicated, and costs a lot But of money!that isn’t quality; it’s incompetence.
What the customer thinks he is buying, what he considers value, is decisive–it determines what a business is, what it produces, and whether it will prosper. And what the customer buys and considers value is never a product. It is always utility, that is, what a product or service does for him.
Profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity. If archangels instead of businessmen sat in directors’ chairs, they would still have to be concerned with profitability, despite their total lack of personal interest in making profits.
A company can make a social contribution only if it is highly profitable.
Managers must convert society’s needs into opportunities for profitable business. That, too, is a definition of innovation.
October 27th, 2008
What follows are some real questions I have answered either face to face or in e-mail over the last 90 days in response to the current downturn in Silicon Valley.
Q: I just completed my first two years of consulting–which were spectacular–after 20+ years of full time work. But long term clients have just dropped me, and after a rather frantic couple months of chasing every lead I could, and exhausting my list, I am facing the imminent need to shut down my operation and go back to getting a job somewhere. What can I do?
A: One book you might read is “Rainmaking” by Ford Harding (an excerpt from page 22, emphasis added)
For your own business you must gain a feel for two variables. The first is the typical gestation period from the time you first make contact with a prospect to the time you actually sign him as a client. Depending upon your business this can range from a couple of months to over a year. The second variable is the typical conversion rate from prospect from client. This may have several subsidiary rates. [...]
Understanding them will help you complete the following sentence, which underlies one of the key principles of marketing:
“I need x prospects today to have a reasonable assurance that I will have a new client in y months.”
Professionals do not often think enough about the implications of this sentence. They become focused on the pursuit of two or three hot prospects, and once these projects are either won or lost, find that they have too few others in the early stages of development to generate the business they will need in the months to come. This is one of the major causes of “porpoising,” the radical and repeated swing from too much work to too little that so many organizations face. To avoid porpoising you must market and not just sell. To minimize porpoising you will need to generate a continuing flow of new leads.
Q: Is there anything that a professional organization offers in aiding members to get more leads?
A: One of the principles of lead flow is that you have to give to get. Professional communities are not a lead generation service. One of the key points in the “Creating a Consultancy Out of What You Practice” article Theresa referred to in “Two Professional Groups for Consultants” was this one:
Consultants often refer one another to clients they can’t satisfy. “Some get more jobs than they can handle or they get a job that’s not quite right for their expertise,” says Mr. Maclay. They may recommend you to a client, and you should reciprocate when it makes sense, he explains.
As you are out there “frantic..chasing every lead” carry others folks cards and website addresses with you so that even thought it’s not a fit for you it may be a good fit for someone else. I refer business to other consultants frequently. You have to see yourself as part of a larger system or community that will prosper together (or not). See also my “Networking in Silicon Valley” from July of 2007 where I observed:
One of the secrets to navigating Silicon Valley, is that it’s actually a very small place with many connections: some that can take a while to discover are nonetheless quite potent. That being said the single most important thing to avoid is wasting people’s time. Time is more scarce than capital, technology, or knowledge.
Q: I’ve read all the books and really don’t see the merits of all the standard tricks about having a sexy website, publishing a regular newsletter, teaching seminars, etc. I’m sure it’d all help, but it seems like foolish advise for someone starting out. If you don’t have a personal inside referral, or unless the market is so hot and they’re so desperate that they are Googling for you, all the rest is just noise that they’d rather do without.
A: A website, a regular newsletter, seminars are all good ideas for marketing your expertise. They are not noise. Talk to folks who have been consulting five or ten years not just two. If you don’t have a website you don’t exist. I apologize if this sounds too judgmental, it’s certainly challenging times, but establishing a consulting practice that can survive a full business cycle is not easy. It may take longer to succeed than you have runway, in which case finding a part time regular job may allow you to ease into it or a full time job may be more of a fit with your nature. Here are some rules of thumb we have tried to follow over the last five years at SKMurphy, Inc.
- Once you let one client get to be more than a third of your revenue, certainly if they are more than half, you may have inadvertently let them become your employer because you become afraid to tell them “No.”
- As a consultant your job security is your ability to get new work. You need to be continually marketing yourself to avoid “porpoising” or going deep on one or two clients and then going idle until you can find your next big client.
- It’s almost always easier to look for new clients when you have existing client work: it increases your confidence and improves your negotiating position.
- One good book on consulting is Gerald Weinberg’s “Secrets of Consulting” (he also blogs at http://secretsofconsulting.blogspot.com/ ). He advises that in a week you spend two days doing work, two days marketing yourself, and one day getting better at what you do. If you are working on a product to complement your consulting you might modify that to three days doing work, 1 day marketing yourself, and one day developing your product. As work slacks off divide your time between additional marketing efforts and working on your product.
Update February 19, 2009: Ford Harding E-mailed me a reminder to link to his second addition of Rainmaking, called “Rainmaking Attracting New Clients No Matter What Your Field” which has 40% new material in preference to his older addition of “Rainmaking.” The page/quote cited in this blog post are from his first edition.
October 5th, 2008
Sean is speaking Thursday November 6 at the Santa Clara Valley Chapter of the IEEE Technological Management Council on “Ten Business Books in One Hour for the Busy High-Tech Executive.”
Spend an hour and leave with a summary of key business insights and some rules of thumb for successful innovation in Silicon Valley. You might even identify one or two books that you haven’t read that will be worth your time. Sean will cover ten books that form the basis for conventional wisdom in Silicon Valley. They provide the terms, the metaphors, the parables–in short the language–that successful businesses use to develop their plans and monitor their execution. Some of these books are old, but still provide succinct guidelines for adoption decisions organizations have to make when deploying or introducing new technology.
Authors like Clayton Christensen, Geoffrey Moore, Peter Drucker, and William Davidow provide a strategic framework for high technology business; they explain how the world works. Steve Blank’s “Four Steps to the Epiphany”, Doug Hall’s “Jumpstart Your Business Brain” and Michael Gerber’s “E-Myths Revisited” offer valuable perspectives on business; they explain how teams need to view the world. Finally, Peter Cialdini, Al Ries and Jack Trout offer useful insights and rules of thumb for how to influence and act as a change agent both within a company and externally.
If you are
looking for a speaker for your next Silicon Valley meeting
contact us.
June 3rd, 2008
I had the pleasure of reading “Three Men in a Boat” and “Three Men on a Bummel” by Jerome K. Jerome last week, two great books that I heartily recommend. Although they are more than 100 years old (Boat was first published in 1889 and Bummel in 1900; many of his works are available from Project Gutenberg) they are proof we haven’t changed much in a hundred years.
This passage in Chapter 15 of “Three Men in a Boat” on Work captures the spirit of perfectionism and that can hinder startup founders, especially those that are bootstrapping out of a spare bedroom or study in their house.
It seemed to me that I was doing more than my fair share of work on this trip, and I was beginning to feel strongly on the subject.
It always does seem to me that I am doing more work than I should do. It’s not that I object to work, mind you; I like work; it fascinates me, I can sit and look at it for hours. I love to keep it by me, the idea of getting rid of it nearly breaks my heart.
You cannot give me too much work; to accumulate work has almost become a passion with me; my study is so full of it now that there is hardly an inch of room for any more. I shall have to throw out a wing soon.
And I am careful of my work, too. Why, some of the work that I have by me now has been in my possession for years and years, and there isn’t a finger-mark on it. I take great pride i my work; I take it down now and then and dust it. No man keeps his work in a better state of preservation than I do.
But, though I crave for work, I still like to be fair. I do not ask for more than my proper share.
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