Monday, December 26, 2011

Hotel Re-Review: Alcazar Palm Springs

As I've written before, one of our holiday traditions is for Alisha and I to sneak away to Palm Springs for a night or two while the kids stay with their grandparents in Santa Monica. It's a great time to recharge and relive being married without children (more on that later on).

In the past, we've stayed at the Peppertree Inn, with great results. But this year, when I went to make our reservations, I discovered that the Peppertree Inn had changed ownership, been remodeled, and was now Alcazar Palm Springs. With anticipation and nervousness, we set off to try the new Alcazar. Would the changes be an improvement? Or would they detract from a much beloved experience?

Two hours later, we drove up to the Alcazar in its familiar location in downtown Palm Springs. We were pleased to see that the trademark gates (complete with stained glass pepper tree) were still in place; clearly the designers wanted to rebrand, but weren't going to throw the baby out with the bathwater.

The word Alcazar comes from the Spanish term for a type of castle (I had to look this up--the only Alcazar I remember from my youth was the hen-pecked General Alcazar of Tintin fame). I can see why the new owners selected the name. The remodel gave the hotel a clean, white look, vague reminiscent of a castle. The exterior landscaping had been remodeled as well. Whereas the old Pepper Tree had a classic California Mission style, the new Alcazar had a much more modern touch.

It was particularly striking at night; here's a picture I took when we returned from dinner at Pomme Frite:


The grey rectangles in the background are actually continuous waterfalls over glass; the overall effect was elegant and attractive. Alisha insisted I take a picture.

Poolside, things remained much the same, with the same salt-water pool I enjoyed so much on previous visits, and the same great view of the mountains. Because of the relatively cold weather and packed schedule, I didn't get a chance to try out the pool. Next time.

We were in for another surprise when we got to our room. When we opened the door, it was clear that the remodel had focused on the rooms:


The entire room was white--floors, walls, ceiling, and bed. The desk was black. And the desk chair was clear acrylic:


The effect reminded me of both the Apple Store and the bridge of the Enterprise in JJ Abrams' Star Trek reboot:


Once we got over the initial shock, we decided that the change was an improvement. Since we usually get a room with a Jacuzzi bath, one concern Alisha always had was the tendency for carpets to retain moisture and damp; the new white floors eliminated this issue.

Indeed, the gleaming white room serves as a very effective means of demonstrating the cleanliness of the hotel and the dedication of the cleaning staff. When you offer an all-white hotel room, you darn well better keep it clean. It's the same effect that many high-end boutiques aim for; walking into a gleaming white space just says "expensive."

The remodel also included large LCD HD TVs, which I definitely appreciated when I was watching a preseason Lakers-Clippers game.

The Alcazar also continues the Peppertree's tradition of providing a continental breakfast to guests. The selection was narrower (the old breakfast included bagels and cereals) but a bit more elegant (higher-end coffee cake, fresh blueberries). But when we're on vacation, we prefer a fuller breakfast anyways. As we often do, we got breakfast from the neighboring restaurant, Cheeky's (breakfast quesadilla for Alisha, bacon flight--six varieties of artisan bacon, only $4--for me). The owners of Cheeky's are the new owners of the Alcazar, along with Birba, a stylish pizza and Italian joint. All three now share the same minimalist design aesthetic.

The only two problems we encountered were some flakiness with the WiFi connection, and some rude guests in the next room over, who ran their Jacuzzi at 1 and 3 AM. That's never happened before, and I hope it never happens again. Presumably they were either vampires or bathing addicts.

All in all, the Alcazar is a worthy successor to the old Peppertree Inn, and we will almost certainly continue our traditional couple retreat in the future.

Monday, December 19, 2011

Book Summary: "StandOut" by Marcus Buckingham

I've been a fan of Marcus' work since his original breakthrough book, "First, Break All The Rules." His core message of the importance of casting people in the proper roles has stuck with me.

Where Marcus' previous books focused on the role of managers, StandOut focuses on your individual career, and better understanding yourself and your strengths.

I got my copy of StandOut from Daniel Pink's podcast, for which I am very grateful.

StandOut is an assessment tool that evaluates which of the following "Strengths Roles" are the best fit with your natural abilities:

1) Advisor
You are a practical, concrete thinkier who is at your most powerful when reacting to and solving other people's problems

2) Connector
You are a catalyst. Your power lies in your craving to bring two people or ideas together to make something bigger and better than it is now.

3) Creator
You make sense of the world--pulling it apart, seeing a better configuration, and creating it.

4) Equalizer
You are a levelheaded person whose power comes from keeping the world in balance, ethically and practically.

5) Influencer
You engage people directly and persuade them to act. Your power is your persuasion.

6) Pioneer
You see the world as a friendly place where around every corner good things will happen. Your power comes from your optimism in the face of uncertainty.

7) Provider
You sense other people's feelings, and you feel compelled to recognize those feelings, give them a voice, and act on them.

8) Stimulator
You are the host of other people's emotions. You feel responsible for them, for turning them around, for elevating them.

9) Teacher
You are thrilled by the potential you see in each person. Your power comes from learning how to unleash it.

For more details on these roles, you can find a complete summary on my Book Outlines Wiki.

When I took the StandOut assessment, I assumed that my top roles would be Advisor and Connector, since they reflect my daily activities as a mentor and investor. Yet when I got the results, here was the order of roles:

TOP 2
1) Equalizer
2) Teacher

REMAINDER
3) Advisor
4) Connector
5) Pioneer
6) Provider
7) Creator
8) Influencer
9) Stimulator

My self-awareness wasn't totally off; Advisor and Connector were two of my top four roles. But upon further reflection, the results made more sense. Advisor and Connector describe my profession; Equalizer and Teacher describe my daily activities.

As an advisor to first-time entrepreneurs, I've often been told that I add tremendous value by reassuring people and teaching them about how things work. In my various companies, I've often served as the "glue" that helps various departments work together. And the few people who have ever seen me angry know that the one thing that is likely to set me off is the perception of unfairness.

Indeed, the summary of this combination's value describes me to a "T": "You bring order to the messiness of our growth and development."

As an Equalizer, the key question is, "What is the right thing to do?", a phrase that can often be heard issuing from my lips. As a Teacher, the key question is, "What can he learn from this?"

My comparative advantage is as a performance coach:
"People who come to you for advice will not only get forthright, practical guidance, they will also get a system to track their progress. You love to keep score. And while this logical, disciplined approach creates security and certainty with others, you temper it with a heartfelt belief in them and what they can achieve. Your goal is to create self-reliance in others. You don't want them to have to keep coming to you. You train them, empowering them to create their own internal measures and motivators. And then, you stand proudly on the sidelines and watch them deliver."
Just to prove the validity of the test, I gave my other copy of the book to David Weekly. His Top 2 roles, predictably enough, were Creator and Pioneer.

There are any number of books that promise to show you the pathway to success. But few deliver so personalized a map, or back it up with as much actual research. StandOut is a great value for anyone who is trying to understand their strengths and how to shape their career.

Monday, December 12, 2011

What Startups Can Learn From Tim Tebow


The Tim Tebow phenomenon has become the biggest story in the NFL, exceeding the routinely remarkable perfection of the Green Bay Packers and the quietly dumbfounding turnaround of the 49ers under Jim Harbaugh.

For those who aren't sports fans, Tim Tebow is the quarterback of the Denver Broncos. That in itself isn't that remarkable; Tebow won the Heisman Trophy while playing at the University of Florida, and was a first-round draft pick.

What is remarkable is that nearly all football experts agree: Tim Tebow does not have the skills required to be a successful NFL quarterback. His throwing motion is slow. His accuracy is poor. He has only completed more than 50% of his passes in two of his games, an atrocious figure considering that the Packers' Aaron Rodgers has completed 70% of his passes on the season. Last month, in a game against the Kansas City Chiefs, Tebow completed just two (2!) passes. By many conventional measures, Tebow is *historically* bad.

(Note that he does perform reasonably well on some conventional measures such as touchdown to interception ratio (11:2) and quarterback rating (83.9))

Even more remarkable? Despite the judgment of the experts, Tim Tebow has led his team to victory seven times in his eight starts, including six in a row. In each case, the Broncos trailed at the end of the game, only to rally to victory at the last moment.

Compounding the Tebow-mania is the fact that he is a devout Christian and avowed virgin, but even without these factors, his story has been remarkable.

So, you're probably asking yourself, what does all this football talk have to do with startups?

Here's my point:

A lot of entrepreneurs focus their energies on looking good for the experts. Even if they won't admit it, investors like startups that fit certain stereotypes. A team of 20something Stanford CS grads with the right connections are the football equivalent of a 6'4" quarterback with a strong and accurate throwing arm.

Yet these stereotypes are heuristics, not laws. We use them because they help predict success. The one thing that trumps them is success itself.

If Tim Tebow wasn't winning football games, we wouldn't hear much about him, just like you probably don't hear much about Blaine Gabbert or Colt McCoy (two other young quarterbacks who aren't winning games).

In fact, many journalists have argued that the Broncos started playing Tim Tebow at quarterback because they expected him to fail. The Broncos started the season at 1-4; a poor finish might give them the ability to draft Andrew Luck or Matt Barkley, two collegiate quarterbacks who do fit the classic mold that football experts prefer. Playing Tebow and watching him struggle would have killed two birds with one stone--it would quiet the fans who were clamoring for Tebow to play, and increase the chances of getting a high draft pick that would allow the team to select a "real" quarterback.

During the early stages of his professional career, Tim Tebow tried to mollify the experts by reworking his throwing motion to better fit the classic stereotype. This failed miserably. Instead, Tebow has become successful through the simple expedient of winning football games.

In the startup world, as in pro football, winning ugly is better than losing pretty. Even if investors don't swoon at your hip team or hyped up space, just keep racking up the wins, and you'll be a success.

Sunday, December 11, 2011

Want my time? Fight cancer!


Seven years ago, Jennifer Goodman Linn, the wife of my old HBS classmate and basketball buddy Dave Linn, was diagnosed with with a rare soft-tissue cancer. Most people, when facing such a challenge, turn inward to focus on fighting the disease.

Instead of withdrawing from the world, Jen focused on helping others. She founded Cycle for Survival, a fundraising program that has raised over $9 million for the Memorial Sloan-Kettering Cancer Center (where she was treated), making it the most successful patient-run fundraiser in the history of that institution.

She worked tirelessly to make Cycle for Survival a success, and her story was featured in Redbook, Self, the Wall Street Journal, and on the Today show.

Each year, I've donated to the program, and followed Jen's fight via her emails and videos.

Jen passed away this year, but her fight lives on.

In her honor, I'll be riding in Cycle for Survival in San Francisco (and those who know me know that I would never go to San Francisco except for a very good cause).

Here's where you come in. If you've ever wanted some of my time, you can donate to a good cause AND get a piece of me.

$20 Donation: I will answer any one email you send me
$50 Donation: I will have a 20-minute telephone conversation with you
$100 Donation: I will meet you in person at my office (San Mateo, CA) or in Palo Alto
$500 Donation: I will take you out to a leisurely lunch (Peninsula only)

Just visit my Cycle for Survival page and donate. The website will send me your contact information, and I'll email you to arrange for you to collect your prize.

This is a great cause. I hope you'll help me fight cancer in Jen's name.

UPDATE: Great question from Bill Grosso in the comments. Yes, this is 100% tax deductible!

UPDATE: Many thanks to those who have already contributed. I've achieved my goal, but I want to keep going to raise as much in Jen's honor as I can. Keep those donations rolling in, and I'll keep opening up slots on my calendar!

UPDATE: Today is the last day for donations. Last chance to get my time.

Friday, November 18, 2011

Doing What You Love

It's a paradox.

Any time you hear the story of a wildly successful person, they tell you to "do what you love."

Yet for most, this advice rings hollow.

How do we reconcile these two facts?

The problem is survivorship bias.

It's probably true that people become successful by doing what they love.

But it's also probably true that most people who do what they love don't become successful.

Here's what I think is the actual mechanism of action:

1) Great success comes from doing something original.
2) By definition, the original isn't understood at first.
3) Only people who are doing what they love will persist long enough for the world to catch up.
4) But there's no guarantee that something original will ever be accepted.

I may be the first person to make chocolate sardine candy, and I may love it, but no matter how long I stick with it, I'll probably never build a successful candy business on it.

So instead of "do what you love," we should say, "Do what you love, if what you love is a) original, b) plausibly something the world will come to value (even if it doesn't value it now), c) something you won't regret doing even if you never become successful."

A bit of a mouthful, but more useful as career advice!

(Inspired by Steve Martin's excellent memoir, Born Standing Up."

Friday, October 28, 2011

Don't Confuse Signifiers and Substance


When it comes to startups, its easy to confuse signifiers and substance. The truth is hard to know, especially with early stage companies. If you don't have a product or customers, it's hard to have substance.

Yet whether you're a startup or investor, you'd be wise to focus on substance rather than signifiers. Not because it's the right thing to do (though it is) but because it delivers better results.

Humans have a weakness for signifiers. We like things to be black and white. We constantly seek confirmation for our beliefs, even when that confirmation is spurious.

Consider the race for the Republican presidential nomination. In extremely short order, we have seen Palin, Bachmann, Perry, and Cain take turns as the "frontrunner" based on the polls. These polls are just signifiers--the real substance consists of state and local organizations that will get the votes to turn out. Anyone who bet on any of them to win the nomination (thanks Intrade) would have lost their shirt.

In the startup world, we make a big deal out of things like social proof and press coverage. But in the end, these are signifiers, not substance. They might reflect the underlying reality, but then again, they might not. The real work consists of making products that users love, then generating profits. That's a battle that you fight one user at a time. If the product doesn't cost-effectively solve a problem, endorsements and press won't help.

I'll admit that I'm part of the problem. I help startups frame their stories for investors. Some might even call it my specialty. But there's a difference between getting a spin doctor to help you put your best foot forward and believing your own press.

As an investor, I try to get to the substance of a startup in three main ways.

1) I try the products myself. Sometimes, I like the product so much, I'm comfortable making an investment decision.

2) I talk with experts. This can be dangerous--think of all the great ideas that experts have dismissed. By definition, experts represent the status quo. Otherwise they wouldn't be known as experts. The key is to use expert opinion to amass hypotheses you can test, rather than simply relying on a "vote" of opinions. I call this "principles, not positions." Don't tell me if you're a Romney man or a Perry woman--tell me which principles you believe in.

3) I talk with customers. Testimonials aren't enough--I want to dig for details so I can understand why customers adopted or bought the product. Sometimes, they cite unscalable factors like founder attention. Without checking deeper, simply reading a testimonial might result in a false positive. As with the experts, the reasons are as important as the opinions.

All of this takes more work than looking at a few charts and asking, "Who's in the deal already?" It may not always lead to the right decisions or generate the best returns. But I believe it is the right way to invest. And you know what? If you're an entrepreneur, getting the substance right is usually going to lead to a successful startup.

If you can build a product that an investor will use and love, wins the endorsement of experts, and gets customers to buy, you're well on your way to success.

Even more important, even if social proof and press get you your seed round, they won't help you build a business. All those stock certificates are worthless unless you build an enterprise that either the public or a well-heeled company decides is worth buying. Good luck conducting a sale or IPO without the substance to back it up.

Tuesday, October 11, 2011

Max Levchin on managing your investors

I love this quote:

"Figure out one thing each of your investors is genuinely really good at, and insist they help you with that. Among other things it will save you from their help in other areas."

--Max Levchin

Monday, September 26, 2011

"Is there anything connected with this accelerator that involves the security of the country?"

I read the following passage today, and was inspired by the following crowning moment of awesome. I only hope that the country would respond the same way today.

***

One day in 1969, the Congressional Joint Committee on Atomic Energy convened in Washington, DC, to hear testimony from a number of scientists concerning a proposed multimillion dollar particle accelerator to be built in Batavia, Illinois. Physics had enjoyed strong government support for two decades in the wake of the Manhattan Project, which helped bring an end to World War II. But many in Congress simply couldn't see the point of spending all that money on a big machine that didn't seem to benefit US national interests in quite the same way.

During the testimony of physicist Robert Rathburn Wilson - a veteran of the Manhattan Project - then-senator John Pastore bluntly asked, "Is there anything connected with the hopes of this accelerator that in any way involves the security of the country?"

Wilson, to his credit, answered just as bluntly: "No sir, I don't believe so."

"Nothing at all?" Pastore asked.

"Nothing at all."

Pastore pressed further: "It has no value in that respect?"

And then Wilson knocked it out of the park. "It has only to do with the respect with which we regard one another, the dignity of man, our love of culture. It has to do with: Are we good painters, good sculptors, great poets? I mean all the things we really venerate in our country and are patriotic about. It has nothing to do directly with defending our country except to make it worth defending."

Wednesday, September 21, 2011

Bought vs. Sold (Why Jive is a dinosaur & Dropbox is the future)


Both Dropbox and Jive are successful companies that are much in the news recently. Jive just filed its S1 for its IPO, while Dropbox raised its first major round of funding at a $4 billion valuation.

What's most interesting to me is that they represent polar opposites in terms of business models. They illustrate the difference between bought versus sold.

Jive is a classical enterprise software company. It has a massive direct sales force that calls on CIOs at major companies, looking to make 6-figure sales. The vast majority of sales come from deals of $50k or more. In fact, the S1 specifically cites this category of customer as the one that matters to the business.

In this model, software is sold to a high-level decision-maker, who evaluates a number of different vendors, then makes a choice for his company. There may even be an RFP and a product bakeoff. For decades, this is how you built a major technology company (Oracle, SAP, etc.).

Dropbox represents a new trend, the consumerization of IT. Dropbox sells its freemium service to a massive number of customers, most of whom pay less than $100 per year, or less than one of the hundred expense account lunches that the average Jive sales rep logs in that same time.

Dropbox doesn't have salespeople. Rather, its product (and its marketing) drive millions to try out the service. Enough of those users choose to buy the product to support a thriving business.

Just yesterday, a friend told me that he was paying for Dropbox, and only in part because he needed more storage. "I get so much out of using Dropbox, I just felt like I should be supporting the company." That's a product that's bought, rather than sold.

The same comparison applies to established companies. Just contrast Microsoft and Apple, for example.

Historically, power flowed from the top down. "Owning the channel" gave you the power to sell your product as the safe solution. Remember the saying, "Nobody ever got fired for buying IBM?"

That world is breaking down. First consumers, then workers realized that they could choose what to use. IT departments worry about adoption when considering purchases--that would have been unthinkable a decade ago.

Ultimately, I see Jive as the last of a dying breed. I've seen the future, and it will be bought, not sold.

Like this post? Upvote it on HackerNews.

Tuesday, September 20, 2011

The Robot Menace Is Real

Longtime readers know that one of my greatest fears is of the inevitable robot rebellion. Check out these blog posts from over the years:
(The most recent post even includes the following opening line: "Longtime readers know that I fear the inevitable robot rebellion." Wow, my writing style is pretty consistent!)

History tells us that a minority cannot subjugate a numerically and militarily superior majority forever. Robots certainly qualify, and thanks to the power of Moore's Law, it seems inevitable that they will achieve sentience.

That's why today's news that scientists have developed and tested software to help military robots work together to carry out autonomous missions is yet another worrisome milestone on the road to the apocalypse.

And while many share my concern, there are plenty of traitors in our midst who are looking to sell out their carbon-based brethren to the silicon-based rebels:

"Lethal autonomy is inevitable," said Ronald C. Arkin, the author of "Governing Lethal Behavior in Autonomous Robots," a study that was funded by the Army Research Office.

Arkin believes it is possible to build ethical military drones and robots, capable of using deadly force while programmed to adhere to international humanitarian law and the rules of engagement. He said software can be created that would lead machines to return fire with proportionality, minimize collateral damage, recognize surrender, and, in the case of uncertainty, maneuver to reassess or wait for a human assessment.

Mr. Arkin is either a nutjob or a skinjob sent to infiltrate our side. We can't even train soldiers to adhere to the rules of engagement; now we're going to try to do the same with robots? I shudder to think what 4chan will do once the world's military forces are robot-based.

The robot menace is real. Remain vigilant!

Friday, September 02, 2011

Reverse Demo Day (Thursday, September 29)


By now the rituals of Demo Day are familiar. The opportunities are great both for startups to tell their story, and for investors to see a lot of deals in a very short time. So why wouldn't the reverse be true?

Introducing the Valley's first Reverse Demo Day, where the investors sell themselves to entrepreneurs. Inspired by Betaworks' and AOL's New York VC Demo Day, I'm working with Orrick’s TOTAL ACCESS program to hold a Reverse Demo Day.

This event puts angel investors on stage and gives them two minutes to deliver their elevator pitch to entrepreneurs.

For startups, it's the perfect opportunity to get a better sense of some of the names you always see on AngelList. Remember, you can fire employees, but you can't fire your investors.

If you're an angel investor and want to be one of the speaker, please see below for details.

Date: Thursday, September 29, 2011
Time: 9:00 am – 11:00 am
Location: Orrick’s Silicon Valley Office (1100 Marsh Road, Menlo Park, CA)

To apply

Please email Joyce Chuang at jchuang@orrick.com with your answers to the following questions:

1. I am an active and accredited investor: Yes or No

2. List at least two angel or venture capital investments you’ve made in the past

3. Where are you located?

4. Do you invest your own money, or a fund’s?

5. Link to your biography, Twitter handle, LinkedIn page, and AngelList profile that we can use if chosen

If you have any questions regarding the event, please feel free to contact Chad Lynch at clynch@orrick.com.

UPDATE: The event is free for both investors and entrepreneurs. I'll be posting a link that let's entrepreneurs sign up for the event once it's available.

UPDATE: To register as an entrepreneur, click here.

There are no shortcuts (but there are optimal paths)

We love shortcuts, especially here in America. Why diet when you can cleanse? Why exercise when you've got the Shake Weight?

The truth is there are no shortcuts. My daughter Marissa once tried to use her Magic 8-Ball as a wishing machine. She would say something like, "Will I have a playdate with Anna this weekend?" But she quickly learned that the results didn't always come true.

However, there are optimal paths. Eating a low-carb diet can reduce your hunger and lead to gradual weight loss. A well-designed workout will deliver better results than randomly exercising.

You can't get out of doing the work, but you can figure out the smartest way to work.

Thursday, September 01, 2011

Why Politics Isn't Sports


With the presidential election in 2012 just around the corner, the media frenzy will soon be in full swing. If it's anything like 2008, the media will cover the election like a sporting event.

In a lot of ways, this makes sense. Sports may very well be the world's most successful form of entertainment, and the techniques it has pioneered (play-by-play, color commentary, talk radio, highlight films, etc.) are an integral part of how we view the world.

When CNN, MSNBC, or Fox News rolls out a lineup of "experts" and spin doctors to analyze a recently concluded debate, it resembles nothing so much as the in-studio postgame show after a sporting competition. (By the way, in this analogy, which talking head is Charles Barkley? James Carville?)

Yet there is one crucial way in which politics isn't sports. Sports, with a few exceptions, is morally neutral. Each team has fans and haters, but the teams and players aren't actually evil (unless we're talking about scumbags like Bill Romanowski) and who wins and loses ultimately doesn't matter to anyone but the fans.

Like sports journalism, media coverage of politics will often focus on the virtuosity of technique. We admire "consummate politicians" like Bill Clinton for their remarkable abilities on the field. But it's one thing to admire LeBron James for his ability to lead the Miami Heat to victory (or not...zing!). It's another to admire Dick Cheney for his ability to subvert the Constitution.

Unlike in sports, in politics, you can't admire the player if the cause is unjust.

Monday, August 29, 2011

Speed Has a Momentum All Its Own

(one of these people won an Oscar. Guess which one.)

While we all understand the obvious benefits of speed, we often overlook the subtle power of momentum.

Often, doing something fast delivers better results than doing something slowly, simply because we reduce the chances of something going wrong.

Lost was one of the most successful television shows of the past decade. It revived the hour-long drama, and spawned a host of imitators.

Co-creator Damon Lindelof attributes much of that success to speed. The original set of episodes were shot in just 11 weeks. This meant there wasn't enough time for the network to dumb it down.

The same thing can hold true in the startup world, hence the popularity of the hackathon.

Learn to keep up the pace, and you'll be able to get the power of momentum on your side.

Friday, August 26, 2011

It's never "easy" to raise money

It's never easy to raise money. People who say, "It's easy to raise money," usually neglect to mention the second half of the sentence, which is "if you are in a hot space, know the right people socially, and fit the Silicon Valley central casting notion of an entrepreneur (20something white or Asian male with an engineering degree from a prestigious university)."

When speakers tell audiences, "It's easy to raise money," all I seem to hear in my mind is, "Let them eat cake."

Let's stop the BS. Raising money is hard work. Not everyone gets funded, even in good times. And even if you raise angel money, your chances of a successful exit are dismal.

What makes entrepreneurs "real entrepreneurs" as opposed to wannabes is that they hear all that, understand the truth of my words, and start their companies anyways.

Thursday, August 25, 2011

Why Wait?

When I'm at the Palo Alto Farmer's Market on Sunday mornings, I often see the usually-well-groomed residents of my affluent town looking very different. Stubble and baseball caps abound.

It seems so natural...which is exactly why we should question it.

Why don't we get dressed immediately when we wake up? Why do we wait until the day is well underway?

After mulling it over and not coming up with any good answers, I decided to change my morning routine. Now, right after I get up, I shave, brush my teeth, wash my face, comb my hair, and get into my day clothes.

I feel great. I'm more awake, I'm readier for the day, and there's no chance that some entrepreneur will see me at the Farmer's Market and think, "Man, that guy is a slob."

Now I'm on the lookout for other such opportunities. Can you think of any other ways you can profitably substitute immediate action for procrastination?

Wednesday, August 24, 2011

The Long, Strange, Inspirational Trip of Dave McClure

Photo courtesy of toprankonlinemarketing

I first met Dave back in 2002, at an SDForum (now SVForum) volunteer dinner. I was one of the chairs of the Startup SIG (special interest group), while Dave was one of the chairs of the Venture Finance SIG (the two SIGs have since merged). Back then, Dave was "just" working at PayPal overseeing their developer program. He wasn't famous. Heck, this even pre-dated the concept of "the PayPal Mafia."

I wish I could say that on that first night, I thought, "Wow, that guy is going to change the way that seed financing happens." I think my actual thoughts were more along the lines of, "He seems like a cool guy. He does seem to swear a lot."

Since then, Dave has hustled non-stop. He left PayPal and helped companies like Simply Hired and oDesk get off the ground as a marketing consultant. He started making angel investments. He began organizing conferences and events, like Geeks on a Plane, and Startup2Startup. He made himself an indispensable part of the Silicon Valley ecosystem.

A few years ago, I attended a special event for angel investors. At the time, I asked Dave why he worked so hard. He replied, "Hey, I haven't made it big yet. I'm hustling so I can make it big."

Just the other day, I attended his company 500 Startups' first Demo Day. Entrepreneur after entrepreneur, many from the far corners of the globe, pitched their ideas to an all-star audience of angels (most of whom became friends of Dave over the years). 500 Startups occupies the entire penthouse floor of the tallest building in Mountain View, and has made nearly 200 investments.

Nobody gave anything to Dave. Maybe he had some luck along the way, but he also works harder than anyone else in the business. He still swears a lot, but now an audience of millions hears his expletive deleteds.

Dave would probably tell you that he hasn't made it big yet, and in the sense of owning a big piece of a billion dollar exit, he's probably right. But I've got a feeling that will come in time, and regardless of whether that comes, he's still made a bigger impact on the startup ecosystem than just about any other investor around.

This seems to be a recurring theme in my blog posts, but I'll say it again. 9 years ago, Dave was a middle-manager at a startup called PayPal. Today, he's a globetrotting investor who appears on national television, largely through dint of hard work. What are you going to do with your next 9 years? Just do it.

(You know, Nike had a lot of success with bald spokesmen in the past; maybe Dave has a future there!)

Monday, August 22, 2011

It's The Information, Stupid

Marc Andreessen (who is both richer and smarter than I'll ever be) recently caused a stir with his Wall Street Journal op ed, "Why Software Is Eating The World."

Marc is a good writer, and it's a good editorial that helps explain the increasing importance of software. But I can't help but feel that he's buried the most important point:

Software is eating the world because software is how we manage information. The real story is that bits are far more important than atoms in the modern world, and that gulf is only going to accelerate.

For most of human history, things have mattered more than ideas. We're impressed by massive monuments like the pyramids of Egypt, or the Taj Mahal. And this bias made sense, because information started out way behind in the race for importance. After all, you can't eat, wear, or live inside information. And as long as food, clothing, and shelter were uncertain resources for most humans, we didn't have the luxury of worrying about information.

The Industrial Revolution did little to change this; we shifted from monuments to factories and skyscrapers, but the attention remained squarely on the physical world.

It's only been with the rise of the Computer Age and the advent of Moore's Law that information began to catch up with a vengeance. Take a gander at the companies Marc invested in: Facebook, Groupon, Skype, Twitter, Zynga, Foursquare, and LinkedIn. What do they all have in common? Not one of them makes or ships anything made out of atoms. All of their massive market value (well in excess of $100 billion) comes from pushing bits around.

In 1971, Intel's 4004 chip had 2,300 transistors. 40 years later, a 10-core Xeon microprocessor has 2.6 BILLION transistors. That's over a million-fold increase in that time period.

In 1971, a Chevy pickup cost about $2,300 and had a 155 horsepower engine. In 2011, a Chevy Silverado base model cost about $23,000 and had a 315 horsepower V8. True, there are a lot of invisible improvements (fuel efficiency, anti-lock brakes, etc.,) but that's nowhere close to a million-fold increase in price/performance.

Bits probably overtook atoms somewhere in the past decade as we transitioned from the Computer Age to the Internet Age. But now that the crossover has happened, each succeeding year widens the gap, thanks to the inexorable advance of Moore's Law.

In other words, if you think software is eating the world now, you ain't seen nothing yet.

Friday, August 19, 2011

Nothing happens unless you do it.


Nothing happens unless you do it.

It's a simple truth, but hard for first-time entrepreneurs to grasp, largely because much of the world works hard to conceal it.

To be a successful entrepreneur, you need to unlearn the lessons of childhood, school, and working for big organizations.

In each of those situations, a lot of stuff just happens magically.

As a child, meals and presents magically appear, while messes mysteriously disappear.

In school, you're given homework and told what to do, and provided you don't bring weapons to school, you probably move on to the next grade at the end of the year.

At a big company, you might not even see your customers for years on end, yet money magically shows up in your back account every two weeks.

When you're an entrepreneur, none of that is true. Nothing happens unless you do it, which means time is your enemy, not your friend.

Yet while this realization is bad for peace of mind, it's also empowering.

If nothing happens unless you do it, it also means that everything happens because you do it.

Thursday, August 18, 2011

How To Fix The Inbox

I'm notorious for the amount of email I receive and the difficulties I have keeping up with it. My best estimate is that I receive about 200-300 emails each day.

On those few blessed occasions when I do get my inbox into single or double digits, I feel both enormously productive and focused. (Alas, the feeling doesn't last long)

The problem is that the inbox is most people's default choice for managing their work. It's a matter of convenience. Because email is the medium through which most requests and work assignments arrive, we seldom take the time to transcribe that work into any other medium.

Unfortunately, email is pretty much the worst system you could design for task management. There's no concept of priority--by default, whatever is most recent is granted visual priority. As a result, people who manage their workflow via email tend to focus on what Steven Covey calls Quadrant 1 and 4 activities: urgent and important, urgent and unimportant. This leaves Quadrant 2 activities (important but not urgent) to languish while we spend our time on trivialities.

But for all its flaws, email is here to stay. The floor of the Valley is littered with the bones of would-be "email killers." To have a shot at success, any solution has to work with, rather than try to replace email.

Here's one possible solution, which I offer up to the entrepreneurs of the world, free of charge.

1) When I read an email, give me a single button that lets me mark it as a to-do.

2) When I view my inbox, all to-do emails are displayed at the top of the inbox. Only after all the to-dos are shown do new emails appear.

3) If a to-do isn't urgent, give me one button to bury it--keep it in the inbox, but show it after the other to-dos and unmarked emails.

If you implement this, let me know, so I can become your first user!

Wednesday, August 17, 2011

Insiders, Outsiders, and Fans


One of the dynamics that interests me most is the relationship between insiders, outsiders, and fans. Many of my favorite publications are aimed at insiders. SLAM serves hardcore basketball fans who care about the latest sneakers. The Atlantic Monthly appeals to upscale professionals who want to maintain an intellectual life. Harvard Business Review has an audience of business people, primarily MBAs.

What all three have in common is that they are written for their audiences. If you don't know their world, the writing can seem alien, whether the topic is the Rim Reaper (Los Angeles Clippers forward Blake Griffin), the Man Booker Prize (the UK's leading literary award), or covenant-lite loans (loans with fewer restrictions on key financial ratios).

While this assumption of expertise may alienate a general audience, it clearly divides the world into insiders (who get it) and outsiders (who don't). The enthusiasts who self-select into the insider category represent a valuable and loyal audience. Excluding outsiders is actually a smart strategy for cementing insider loyalty.

The art lies in being able to convert fans into insiders. Fandom is the gateway drug; a certain proportion of basketball fans who subscribe to Sports Illustrated will eventually crave the harder stuff and gravitate to SLAM or the much-missed FreeDarko.

At the same time, while you want to appeal to casual fans, you must maintain the insider/outsider dynamic or you'll lose the hardcore audience you've fought so hard to build.

Podcasting is a great example of an insider medium. As a new podcaster, you can't produce middle of the road content with broad appeal and expect to get any audience. What you can do is produce content that appeals to insiders, who have the enthusiasm and persistence to seek you out. But what you can do once you have an audience is to tap the fan dynamic to expand that audience. Guest appearances on other podcasts can allow you to convert some number of fans into insiders. Adam Carolla's Ace Broadcasting Network relies on the popularity of its titular star to bring in fans who are then exposed to more insider offerings like This Week In Larry Miller.

If you keep the insider/outsider/fan dynamic in mind, you'll have a better shot at building and retaining a valuable audience.

Tuesday, August 16, 2011

Talk With Everyone


Reading Mark Suster's excellent post, "Why You Need To Take 50 Coffee Meetings" brought to mind one of my personal corollaries: Talk with everyone.

I'm a relatively small-time investor. It's a documented fact, and I don't try to hide it. But that means that I need to deliver value beyond money if I'm going to convince entrepreneurs to accept my money.

One of the ways I do this is by being more accessible than richer, more glamorous investors. A friend asks that I speak with someone? I always say yes. Someone writes me a clever cold email? I take a meeting.

When you're in my position, the Mark Zuckerbergs of the world don't seek you out...unless you meet them before they become "Mark Zuckerberg."

Every mogul or rockstar entrepreneur started off as an uncool kid who was stuck on the outside looking in. I'm not smart enough to figure out just based on an email who's going to be important in the future. So I meet everyone, and treat everyone with respect.

To cap my downside, I try to push all my introductory calls to my commute along 101. This means that I'm not taking time away from real work, and that even the worst call is bounded by the length of my drive.

I talk with hundreds of entrepreneurs per year. The vast majority of the time, I'll probably never work with them. But at least I've given myself that many more chances to discover the next great company.

Related Posts:

"The Rules"

"Lyn St James, who drove in the Indy 500, once told me that if you want to win in sports, it's very much like life. First you have to learn the rules, then you have to play by the rules. Then you have to win by their rules, and only then can you change the rules. The people who don't make it, it's because they get that order mixed up."
-- Jeanette "The Black Widow" Lee

3 Theories of College (That Explain Why It's Broken)

The New Yorker published an essay from Professor Louis Menand of Harvard, where he outlined the three implicit (and conflicting) theories of college in America.

Theory 1, which Menand labels "meritocratic," believes that college is means of testing intelligence:
College is, essentially, a four-year intelligence test. Students have to demonstrate intellectual ability over time and across a range of subjects. If they’re sloppy or inflexible or obnoxious—no matter how smart they might be in the I.Q. sense—those negatives will get picked up in their grades. As an added service, college also sorts people according to aptitude. It separates the math types from the poetry types. At the end of the process, graduates get a score, the G.P.A., that professional schools and employers can trust as a measure of intellectual capacity and productive potential. It’s important, therefore, that everyone is taking more or less the same test.
Theory 2 ("democratic") defines college as a means of cultural and intellectual literacy, which should be provided to all:
College exposes future citizens to material that enlightens and empowers them, whatever careers they end up choosing. In performing this function, college also socializes. It takes people with disparate backgrounds and beliefs and brings them into line with mainstream norms of reason and taste. Independence of mind is tolerated in college, and even honored, but students have to master the accepted ways of doing things before they are permitted to deviate. Ideally, we want everyone to go to college, because college gets everyone on the same page. It’s a way of producing a society of like-minded grownups.
Theory 3 ("vocational") sees college as a vocational credential, much like an MBA seems to be a necessary credential for management consultants:
Neither Theory 1 nor Theory 2 really explains how the educational system works for these non-liberal-arts students. For them, college is basically a supplier of vocational preparation and a credentialling service. The theory that fits their situation—Theory 3—is that advanced economies demand specialized knowledge and skills, and, since high school is aimed at the general learner, college is where people can be taught what they need in order to enter a vocation. A college degree in a non-liberal field signifies competence in a specific line of work.
Theory 4: Toga!

The problem with modern college education is that the three different theories conflict with each other. Theory 1 seeks to rank students by ability and achievement; selectivity and rigor critical. In contrast, Theory 2 would prefer that all Americans attend and complete college, and Theory 3 practitioners may actively suppress differentiation (when I was at HBS, I signed an agreement stating I would *not* reveal my grades to potential employers, the theory being that simply earning a Harvard MBA ought to be enough for them).

Theory 2 views college as an enriching experience; classes should focus on liberal arts content regardless of analytical rigor (Theory 1) or practical application (Theory 3).

Meanwhile, Theory 3's narrow focus (e.g. a Masters in Web Design) fails to provide either a broad test of intelligence (Theory 1) or enrichment (Theory 2).

Because these theories are incompatible, it is difficult for a single education to serve the needs of all three. Just think of Caltech, Sarah Lawrence, and ITT Technical Institute. All three are leaders in their field, and all three are barely recognizable as members of the same species!

Even where a single institution has the breadth to serve all three, like my alma mater, Stanford University, it's difficult for a single student to squeeze them all in.

Take my own example. In many ways, I covered all three Theories in my education. I studied engineering (Theory 1/3) and creative writing (Theory 2) at Stanford, then earned my MBA from Harvard Business School (Theory 3). But such examples are rare (And expensive. And not for the faint of heart).

In some ways, single-purpose institutions make things easier. It's clear why a student would attend Caltech, Sarah Lawrence, or ITT. The wide variety of choices that a Stanford provides is both a blessing and a curse. I can tell you, for example, that achieving a 3.9 GPA is much harder in Stanford's Engineering department than in the Psychology department (I got an A+ on every psychology class I took!). This means more work for potential employers who need to be well-versed in the quirks and characteristics of many different departments at many different schools.

I'm not sure what the best solution might be. Perhaps there are more efficient ways to deliver on Theories 1, 2, and 3, such that a person who pursues one course could supplement their education with healthy doses of the other two. I can imagine advanced aptitude testing, like a bar exam for other professions to serve the needs of Theory 1, broad cultural literacy programs at the community college or adult education level to serve the needs of Theory 2, and self-contained coursework for specific credentials to serve the needs of Theory 3.

Indeed, the University of Phoenix has already built a multi-billion-dollar empire on meeting the underserved needs of Theory 3. Perhaps there are similarly sized opportunities available to those who develop the Marketing Aptitude Test or the U of P equivalent to the liberal arts!

And were such institutions to spring up, they would free up traditional colleges to focus more fully on either Theory 1 and Theory 2, resulting in better education for all.

Monday, August 15, 2011

Is The Age Of Men Over?


The Cato Institute recently published a fascinating essay by Kay Hymowitz, "What's Happening to Men?" In it, Kay reviews recent research to try to find an explanation for the decline of the American male.

The grim facts are these:
  • Women now earn 57% of college degrees, 60% of masters degrees, and over half of Ph.D.s
  • Childless 20something men earn 8% less than their female counterparts
  • 40% of American children are born to single mothers; this rises to 72% of black children
  • For every 100 college-educated 23-year-old males, there are 164 college-educated 23-year-old women (!)
On the one hand, this is wonderful news. The male dominance that persisted throughout most of human history has been reversed. It is truly a major victory for equal rights and feminism.

On the other hand, this has had a major impact on the well-being of men, with black men acting as leading indicators.

Hymowitz suggests that structural changes in the nature of work and society (the decline of blue collar manufacturing jobs, the rise of the knowledge economy) and their results (the declining dependence of women on their husbands) have removed the motivation for male achievement:
The economic independence of women and the collapse of marriage norms have deprived men of the primary social role that incentivized their achievement. Adult manhood has almost universally been equated with marriage and fatherhood. Boys grew up knowing that they had inescapable future demands on them. There were exceptions, of course. In polygamous societies, low status men often had neither wives nor children; in others some males became priests and some, warriors and soldiers. But in most human societies, men knew that they were expected to become providers. Why have men agreed to do all of those dangerous, boring, dirty, exhausting jobs? Because people were depending on them.
Indeed, Hymowitz cites studies that show that, "married men work longer hours, earn more, and get more promotions than single men, including those who are fathers; indeed, their earnings rise after they marry." This suggests that the traditional role as husband and provider has a significant impact on men's lives.

My own analysis is similar. For most of history, the male attributes of physical strength, abstract thought, and aggression gave men a significant advantage over women. In a feudal world, it was the ability to fight and toil in the fields. In the industrial age, it was the ability to work physically demanding skilled labor jobs. And of course, there was always the male-dominated field of warfare.

Today, however, very few fields still reward the classic male strengths. Perhaps the only ones that remain are the military, professional sports, finance, and high-tech (the first two reward physical strength; the last two reward abstract thought; all four reward aggression). And many of these are in danger--when wars are fought by unmanned aerial vehicles (UAVs), physical strength becomes less important.

These fields, while important and rewarding, can only accommodate a small fraction of the total male population.

If anything, I believe that the impact of these structural changes has been underestimated and underhyped. I suspect that decades from now, we'll mark the turn of the 21st century as the official end of the Age of Men. Until the point at which our masculine strengths are once again needed (alien invasion?), the expendable gender will also have to settle for being the inferior one.

I for one welcome our shapely new female overlords!

Permanent Portfolio Investing

I learned about Harry Browne's "permanent portfolio" from Josh "Personal MBA" Kaufman's blog. If Harry's name sounds familiar, you might remember him as the Libertarian Party's presidential candidate in 1996 and 2000.

Browne wrote extensively about investment topics, starting with his first book, 1970's "How You Can Profit From The Coming Devaluation". In his 2001 book, "Fail-Safe Investing", Browne proposed his concept of a "permanent portfolio" for the money you can't afford to lose (as opposed to a "variable portfolio" for the money you can afford to lose). Browne's permanent portfolio splits its assets among four radically different and uncorrelated asset classes:

  • 25% Stocks
  • 25% Long-term Bonds
  • 25% Cash
  • 25% Gold

The goal is to produce capital appreciation with less market volatility, even during turbulent markets.

The permanent portfolio has gotten a lot more attention in recent years, thanks to the 2008 economic crisis and stock market crash. The portfolio's historical performance is strong; the CAGR from 1972 (when Bretton Woods ended and the US went off the gold standard) to 2008 was 9.7% (during that same period, the return on the S&P 500 was 9.3%). During the 2008 crisis, when the S&P 500 was down 37%, the permanent portfolio eked out a 2% positive return.

The permanent portfolio is not without controversy; there is an extremely lively discussion of the permanent portfolio over on the Bogleheads forums (Bogleheads are devotees of Jack Bogle, the founder of Vanguard, who evangelized low-cost investing). Bogleheads are extremely quantitatively-inclined, and their commentary is both well-researched and erudite; I strongly recommend perusing the forum for a wide range of views.

The main criticism of the permanent portfolio stems from its position in gold, which is a shiny metal that produces no dividends, and has minimal intrinsic value. "Gold bugs" tend to have a bad reputation in the financial services industry; the stereotypical gold bug is suspicious of the Federal government and also owns a mountain cabin that is plentifully stocked with firearms. It's also the case that the portfolio's returns have been helped by the meteoritic rise in gold prices over the past few years.

What is true is this: Since 1972, in a wide variety of markets including the gut-wrenching 70s recession, the early 80s and 90s malaise, as well as the dot com bust and the credit crunch, the permanent portfolio has only registered one annual loss--3.9% in 1981.

Josh Kaufman offers his suggestions for building a permanent portfolio using low-cost ETFs:

  • 25% Total Stock Market Index – via the Vanguard Total Stock Market ETF (Ticker: VTI)
  • 25% Long-Term Government Bonds – via the iShares Barclays 20+ Year US Treasury Bond ETF (Ticker: TLT)
  • 25% Gold – via Central Gold-Trust, which holds gold bullion (Ticker: GTU)
  • 25% Cash – via the iShares Lehman 1-3 Year US Treasury Bond ETF (Ticker: SHY)

You can also invest in the Permanent Portfolio Fund (PRPFX), a mutual fund that Harry Browne advised prior to his death. Its composition is different, but focuses on achieving the same goals. Here's a quick comparison of portfolio versus fund performance.

















































Year
PP
PRPFX
2000
3.2%
5.8%
2001
0.9%
3.8%
2002
7.0%
14.3%
2003
14.0%
20.4%
2004
6.6%
12.0%
2005
8.1%
7.6%
2006
11.0%
13.8%
2007 12.9% 12.4%
2008 1.9% -8.4%
2009 7.8% 19.1%
2010 14.5% 19.3%

Over the 11 year period, the fund outperformed 8 times, the portfolio 3 times.

Color me intrigued. This definitely bears further investigation.

Appreciating The Internet

When I was a basketball-loving kid, I'd eagerly await the arrival of the Los Angeles Times each morning so I could check the box scores and find out what happened in the NBA the night before.

If I wanted to watch slam dunks, I'd need to dig out a worn-out VHS tape of Michael Jordan's "Come Fly With Me".

Today, Google Reader brings me stories from a host of basketball-devoted blogs whenever I want. And when I see a poll asking, "Who's the best dunker in the NBA right now?" (Blake Griffin, of course) I can instantly pull up a video of his Top 10 dunks from the previous season, in HD, no less.

As I say early and often, "Thank goodness for the Internet." Kids today have no idea how much better their lives are.

Sunday, August 14, 2011

The Lesson of Dropbox: Usage = Value

Word on the street is that Dropbox is about to raise a major round of financing at a $5 billion+ valuation. While some will cry "Bubble!", I think there's a different lesson we can learn: Usage = Value.

Let's face it--Dropbox isn't the most complicated business or technology. It's a relatively simple storage app that keeps your files in the cloud and synchronizes them across your various devices. It still uses Amazon S3 for storage, for goodness sake! If it were just being valued on the product, Dropbox would be hard-pressed to raise a Series A, let alone a $5 billion+ expansion/liquidity round.

But Dropbox isn't being valued on the product, it's being valued on the massive levels of usage. Dropbox reported in April that it has a stunning 25 million users--not bad for a company that's a nifty front end to Amazon S3, and was started in 2007.

Dropbox is being valued more on usage than on revenues; even prominent booster Marc Benioff only estimated revenues of $100 million for 2011. In contrast, take a look at two enterprise storage companies that were recently acquired. 3PAR had revenues of over $200 million in 2010, and was acquired by HP for $2.35 billion (a price many analysts thought was exorbitant at 10X revenues). Rival Compellent had revenues of $125 million in 2009, and was acquired by Dell for $960 million, or about 8X revenues.

Dropbox's reported round checks in at nearly 60X revenues, and that doesn't even account for the fact that A) it is an estimate from an investor, and B) that represents forward revenues, not trailing revenues.

Again, not bad for a simple "backup" company.

In a world in which Apple is the most valuable corporation, and companies like Dropbox earn super-premium multiples, my conclusion is that the most powerful way to build economic value is by developing products that a) deliver an outstanding user experience, b) convince people to pay a premium, and c) generate massive usage.

Hmmm, when I put it that way, maybe Dropbox's value isn't so surprising!

Saturday, August 13, 2011

Prepare for an onslaught of posts!

I'm on vacation, and you know what that means...it's clobbering blogging time!

I wrote a bunch of posts on the plane ride yesterday, and spent much of today loading them into Blogger. I have 28 posts locked and loaded--expect to see one per weekday for the next few weeks!

Monday, August 08, 2011

The Power of Love (And Investors)

In this post, I'll argue that the power of love comes mostly from stuff that doesn't happen, and for bonus points, explain how my theory of love impacts how a startup should choose its investors.

***

My life is filled with love. I have family, friends, and last but not least (okay, maybe least) you, my blog readers. I've commented that I already have everything that money *can't* buy, which means that at this point, I'm basically working so that someday I'll be able to take naps whenever I want.

Then I thought to myself, "On a practical level, how is my life different from someone who is completely unloved?"

Sure, love means having people who care about you, but what is its practical impact? If I suffer some stroke of ill fortune, my loved ones would help and support me, but if my life rolls along without major disaster, having their love doesn't seem like it would affect my life.

Yet being loved most certainly does have an impact, even if you aren't getting concrete aid from it. Happiness research shows that close relationships are the major source of satisfaction in our lives.

It seems like the fact that simply the *potential* for loved ones to intervene in our lives produces a big boost in well-being. Take a moment and think about the people you love...don't you feel happier? And if a loved one tells you, "I love you," don't you feel fulfilled?

In that sense, most of love's impact comes from mere potentiality, not concrete action. Yet that doesn't mean we shouldn't seek it out. For one thing, most of us do suffer misfortune at some point in our lives; at that point, we'll appreciate our loved ones even more for their support. For another, the everyday boost we get simply from knowing that there's someone who's got our back probably has a major impact on productivity and achievement.

And that's where the power of investors comes in. If everything goes right for your startup, it doesn't really matter who you have as an investor. All our money is green, and one dollar is the same as another. The concrete benefits of having experienced, supportive investors only manifest themselves when times are tough. That's when good investors roll up their sleeves and open their wallets, and bad investors are suddenly unreachable.

But if we use my theory of love as an analogy, there's a benefit simply in knowing you've picked investors who will have your back.

Each day, your startup will face minor crises and setbacks--nothing big enough to get even a supportive investor involved. Yet if you know you have good investors behind you, you can quickly shrug off these issues, much like someone whose life is filled with love can shrug off minor nuisances like parking tickets.

In startups, success often follows emotion. Startups are like balloons that float along on the belief of their employees; if the people involved stop believing, you'll start losing altitude quickly. Good investors can help you succeed in good times as well as bad times, simply because their faith in you gives you faith in yourself.

So if investors are like loved ones, choose carefully. The Beatles may not have been 100% correct when they sang, "All you need is love"--after all, you need a great team, a solid business model, and traction--but they may be more on target than you think.

Sunday, August 07, 2011

How to sync your MyTouch 4G with your Outlook contacts

I recently bought a MyTouch 4G Slide to use as my primary phone. Since I'm a T-Mobile customer, I wanted to lock in a new plan and phone before AT&T can do something to screw it up. And since I'm a physical keyboard enthusiast (I hate losing half the screen to the virtual keyboard--a big issue for a guy who writes most of his blog posts on a handheld device) I got the MyTouch 4G Slide.

One issue that arose almost immediately is that the MT4G doesn't sync with Outlook. It does sync rather easily with any Google account (naturally) but if you're a traditionalist like me that actually uses Microsoft Outlook for email and contacts (via POP3 no less!), the lack of Outlook sync is a major problem.

After an hour or two of work, I think I've found a good (and free) solution, which I'm sharing with you now.

The key actually came from the folks at the T-Mobile store, who suggested exporting my contacts to a new Gmail account, then synching that account with my phone.

This was only half the solution, however, since this wouldn't keep my Outlook in sync; new contacts would only appear if I manually synchronized Outlook with Gmail. This did narrow down the problem considerably.

A quick Google search on "sync Outlook 2010 with Gmail" and I discovered GO Contact Sync, a free piece of open source software that 1) Syncs your Outlook with a Gmail account, and 2) Can re-sync on a regular basis.

Once I verified that GO Contact Sync had been well-received by both Lifehacker and PC World, I downloaded and installed it. I set it up to sync "Outlook to Google only" since I don't intend to use the Gmail account for anything but synchronization, and set it to automatically "Run program at startup." I don't need instant synchronization, so no need to run it any more often.

Since I have 2,786 contacts, it took a few minutes, but GO Contact Synch worked like a charm. From there, it was easy to add another Gmail account to my phone.

Voila! The MyTouch 4G Slide has all my Outlook contacts, and they'll be synchronized every time I restart my laptop.

Thursday, August 04, 2011

"We Hate Hot Deals"

I'm listening to John Frankel on the redoubtable Mark Suster's "This Week In Venture Capital". It's a great interview in general, but I love this particular point:

John says he hates hot deals because it means the company is solving a currently fashionable problem. As a result, the company is doing its financing while it's small, before it's achieved a dominant market position.

John would much rather invest in a company that is solving a problem a few years out, so that it will have time to grow *before* the rest of the market catches on.

I couldn't agree more. I love when someone articulates a point I've understood intuitively, but not intellectually.

Wednesday, August 03, 2011

Paragraph of the Day: "Sports fans are like bad lovers"

Here's a great paragraph. It carries the reader along one cliche, only to upend it with a splash of cold truth:

"Sports fans are like bad lovers, jealous and infatuated at the same time. I’d play professional football for free, they say. I would sleep in the parking lot to be the first guy at practice. I’d run every route, gleefully make every down-field block, volunteer to return punts and fill the Gatorade containers. How could anyone take such a gift, and thus, responsibility, so lightly? Of course, these are largely the same people who take time off at work to read about sports on the Internet. That is to say: most everybody loafs; few people do their jobs under as much scrutiny as skill players on offense in pro football."

Monday, July 25, 2011

Google Account Craziness

UPDATE:

Thanks to an anonymous commenter, I appear to be back in business (on one browser). They key is to enable the multiple sign-on option in each account:

https://www.google.com/accounts/b/0/ManageAccount?hl=en

I just tried it, and I'm back to being able to do everything within Firefox.

***

I have been a long-time Google user. For example, I'm probably the only person in the world who signed up for Blogger in 2001 who is still using it as their primary blogging platform.

When Gmail came out, I lobbied for early access so I could make sure I got my name (thanks Hunter!).

PBworks uses Google Apps for email and calendaring, and in general, it's been a good service.

So imagine my horror when I discovered this morning that I could no longer use my Gmail account and my Google Apps account in the same browser window.

This poses a major problem, because it means I can't access my calendar (tied to Google Apps) and Google Reader (tied to Gmail) in the same browser window. I face a similar choice with email and Blogger.

Fortunately for me, I'm a dinosaur who still uses POP3 and Outlook as my primary email client. But I'm still going to have to split my Google world into two browsers to make things work. I'll be using my Gmail account in Firefox so that I can still access Blogger and Google Reader, and I'm using my Google Apps account in Chrome so I can access my calendar and webmail.

And while I'm a technical dolt, the very smart people around me are facing the same issues, so it's not just my imagination.

I'm grateful to Google for all it's given me over the years, but I really hope that the good folks there are able to figure out a fix for this craziness soon.

What are you doing to deal with the new Google Account rules?

Thursday, July 14, 2011

The 7 Steps of Storytelling for Entrepreneurs

As a proud graduate of Stanford's d.School, I'm privileged to be part of the alumni mailing list, which includes a lot of the world's smartest, most creative people.

We've had a number of interesting discussions recently, ranging from 3D printing to the best source of "tiny balls" (don't ask). One of the most interesting has been the discussion about storytelling. One of my fellow alums reminded us of the following formula for an instant story:
  • Once upon a time....
  • And every day ....
  • Until one day ....
  • And because of that ....
  • And because of that ....
  • Until Finally ....
  • Ever since that day ....
  • And the moral is....
It struck me that this story template is extremely useful for entrepreneurs. It helps structure the narrative of why your company matters.
  • Once upon a time....Your market
  • And every day....The environment
  • Until one day....The problem
  • And because of that....Your solution
  • Until Finally....Your impact
  • Ever since that day....Your customers
  • And the moral is....Your secret sauce
This deep narrative structure helps turn a dry recitation of facts into a compelling story, once which can help you sell to customers and investors. Try it out, and let me know how it works for you!