Philadelphia University Commencement Speech – May 15th 2011

I am honored to be with you as we gather to celebrate your graduation from Philadelphia University.

While I teach at Stanford and Berkeley, to be honest… this is the closest I’ve ever gotten to a college graduation.

I realize that my 15 minutes up here is all that’s between you and the rest or your life, so if I can keep you awake, I’m going to share 4 short stories from my life.

My first story is about finding your passion.
My parents were immigrants…  Neither of them had been to college—my mother graduated from high school but my father left school after the 7th grade.  Still, like many immigrants, they dreamed that someday their children would go to college…  Unfortunately that was their dream—but it wasn’t mine.

I ended up at Michigan State because I got a scholarship…Once I got there, I was lost…unfocused…and had no idea of who I was and why I was in school. I hated school.

One day my girlfriend said, “You know some of us are working hard to stay here. But you don’t seem to care.Why don’t you find out what you really want to do?”

That was the moment I realized I, …not anyone else…was in charge of my life.

I took her advice. I dropped out of Michigan State University after the first semester.

In the middle of a Michigan winter, I stuck out my thumb and hitchhiked to Miami, the warmest place I could think of.

I had no idea what would be at the end of the highway. But that day I began a pattern that I still follow—stick out your thumb and see where the road takes you.

I managed to find a job at the Miami International Airport loading racehorses onto cargo planes. I didn’t like the horses, but the airplanes caught my interest.

Airplanes were the most complicated things I had ever seen. Unlike other kids who were fans of the pilots, I was in awe of the electronics technicians in charge of the planes’ instruments. I would hang around the repair shop just helping out wherever I could. I didn’t know anything, so I didn’t get paid…

But soon some technician took me under his wing and gave me my first tutorial on electronics, radar and navigation. I was hooked. I started taking home all the equipment manuals and would read them late into the night.

For the first time in my life, I found something I was passionate about.

And the irony is that if I hadn’t dropped out, I would never have found this passion…the one that began my career. If I hadn’t discovered something I truly loved to do, I might be driving a cab at the Miami airport.

My life continued to follow this same pattern…I’d pursue my curiosity, volunteer to help, and show up a lot. Again and again, the same thing would happen… people would notice that I cared…and I’d get a chance to learn something new.

Now that you paid for your degree…I’m going to let you in on a secret. It’s your curiosity and enthusiasm that will get you noticed and make your life interesting—not your grade point average.

But at the time…as excited as I was…I couldn’t see how my passion for airplanes and avionics could ever get me anywhere.  Without money, or a formal education, how could I learn about them?

The answer turned out to be a war.

My second story is about Volunteering and Showing Up.
In the early 1970’s, as some of you might remember, our country was in the middle of the Vietnam War—-and the Air Force was happy to have me.

I enlisted to learn how to repair electronics. The Air Force sent me to a year of military electronics school. While college had been someone else’s dream, learning electronics had become mine.

After electronics school, when most everyone else was being sent overseas to a war-zone, I was assigned to one of the cushiest bases in the Air Force, right outside of Miami.

My first week on the base… our shop chief announced: “We’re looking for some volunteers to go to Thailand.” I still remember the laughter and comments from my fellow airmen. “You got to be kidding… leave Miami for a war in Southeast Asia?”

Others wisely remembered the first rule in the military: never volunteer for anything. Listening to them, I realized they were right. Not volunteering was the sane path of safety, certainty and comfort.

So I stepped forward, raised my hand—and I said, “I’ll go.”

Once again, I was going to see where the road would take me. Volunteering for the unknownwhich meant leaving the security of what I knew…would continually change my life.

Two weeks later I was lugging heavy boxes across the runway under the broiling Thailand sun. My job was to replace failed electronic warfare equipment in fighter planes as they returned from bombing missions over North Vietnam.

As I faced yet another 110-degree day, I did consider that perhaps my decision to leave Miami might have been a bit hasty. Yet every day I would ask, “Where does our equipment come from… and how do we know it’s protecting our airplanes?”

The answer I got was, “Don’t you know there’s a war on? Shut up and keep doing what you’re told.”

Still I was forever curious. At times continually asking questions got me in trouble…

once it almost sent me to jail…

but mostly it made me smarter.

I wanted to know more.  I had found something I loved to do.. …and I wanted to get better at it.

When my shift on the flightline was over, my friends would go downtown drinking. Instead, I’d often head into the shop and volunteer to help repair broken jammers and receivers. Eventually, the shop chief who ran this 150-person shop approached me and asked, “You’re really interested in this stuff, aren’t you?” He listened to me babble for a while, and then walked me to a stack of broken electronic equipment and challenged me troubleshoot and fix them.

Hours later when I was finished, he looked at my work and told me, “We need another pair of hands repairing this equipment. As of tomorrow you no longer work on the flightline.” He had just given me a small part of the electronic warfare shop to run.

People talk about getting lucky breaks in their careers. I’m living proof that the “lucky breaks” theory is simply wrong. You get to make your own luck. 80% of success in your career will come from just showing up. The world is run by those who show up…not those who wait to be asked.

Eighteen months after arriving in Thailand, I was managing a group of 15 electronics technicians.

I had just turned 20 years old.

My third story is about Failure and Redemption
After I left the military, I ended up in Palo Alto, a town south of San Francisco. Years later this area would become known as Silicon Valley.

For a guy who loved technology, I was certainly in the right place. Endlessly curious, I went from startups in military intelligence to microprocessors to supercomputers to video games.

I was always learning. There were times I worried that my boss might find out how much I loved my job…and if he did, he might make me pay to work there. To be honest, I would have gladly done so.  While I earned a good salary, I got up and went to work every day not because of the pay, but because I loved what I did.

As time went on, I was a co-founder or member of the starting team for six high-tech startups…

With every startup came increasing responsibility. I reached what I then thought was the pinnacle of my career when I raised tens of millions of dollars and became CEO of my seventh startup… a hot new video game company. My picture was in all the business magazines, and made it onto the cover of Wired magazine. Life was perfect.

And then one day it wasn’t.

It all came tumbling down. We had believed our own press, inhaled our own fumes and built lousy games. Customers voted with their wallets and didn’t buy our products. The company went out of business. Given the press we had garnered, it was a pretty public failure.

We let our customers, our investors, and our employees down. While it was easy to blame it on others…and trust me at first I tried… in the end it was mostly a result of my own hubris—the evil twin of entrepreneurial passion and drive.

I thought my career and my life were over. But I learned that in Silicon Valley, honest failure is a badge of experience.

In fact, unlike in the movies, most startups actually fail. For every Facebook and Zynga that make the press, thousands just never make it at all.

All of you will fail at some time in your career…or in love, or in life.

No one ever sets out to fail. But being afraid to fail means you’ll be afraid to try.  Playing it safe will get you nowhere.

As it turned out, rather than run me out of town on a rail, the two venture capital firms that had lost $12 million in my failed startup actually asked me to work with them.

During the next couple years…and much humbler… I raised more money and started another company, one that was lucky enough to go public in the dot.com bubble.

In 1999… with the company’s revenue north of $100 million…I handed the keys to a new CEO and left. I had married a wonderful woman and together we had two young daughters.

I decided that after 20 years of working 24/7 in eight startups, I wanted to go home and watch my kids grow up.

Which brings me to my last story—There’s a Pattern Here.
When I retired I found myself with lots of time to think.

I began to reflect about my career and what had happened in my 21 years with startups in Silicon Valley.

I was all alone in a ski cabin with the snow falling outside…with my wife and daughters out on the slopes all day… I started to collect my thoughts by writing what I had hoped would become my memoirs.

Eighty pages later, I realized that I had some great stories as an entrepreneur and a failed CEO. But while writing them was a great catharsis, it was quickly becoming clear that I’d even have to pay my wife and kids to read the stories.

But the more I thought about what I had done, and what other entrepreneurs had tried, I realized something absurdly simple was staring at me.  I saw a repeatable pattern that no else had ever noticed.

Business schools and investors were treating new companies like they were just small versions of large companies. But it struck me that startups were actually something totally different. Startups were actually like explorers—searching for a new world, where everything—customers, markets, prices—were unknown and new.

These startups needed to be inventive as they explore, trying new and different things daily. In contrast, existing companies, the Wal-Mart’s and McDonalds, already had road maps, guide books and playbooks—they already know their customers, markets, and prices. To succeed they just need to do the same thing every day.

Now it would have been easy to say, “Nah, this can’t be right—every smart professor at Harvard and Wharton and Stanford believes something different.”

In fact, in your lives this will happen to you.

You will have a new idea, and people will tell you, “That can’t be right because we’ve always done it this way.”

Ignore them…..  Be persistent… Never give up. Innovation comes from those who see things that other don’t.

As a retired CEO, I had a lot of free time.  So I was often invited to be a guest lecturer at the business school at Berkeley. They thought I could tell stories about what it was like to start a company. I was generous with my time…and I showed up a lot.

But I began to nag the head of the department about this new idea I had…one that basically said that everything you learn about starting new companies in business schools was wrong. I thought that there was a better a way to teach and manage startups than the conventional wisdom of the last 40 years. And to their credit…Berkeley’s Business School and then Stanford’s Engineering School let me write and teach a new course based on my ideas.

Now…a decade later… that course called Customer Development is the basis of an entirely new way to start companies.

If you’re in a technology company or build a web or mobile application, it’s probably the only way to start a company.

How did this happen?  By showing up a lot and questioning the status quo.

These days I write a weekly blog about entrepreneurship.  At the end of each post, I conclude with lessons learned—a kind of Cliff Notes of my key takeaways.  So in case you haven’t been listening, that’s how I’ll finish up today.

Be forever curious.
Volunteer for everything.
Show up a lot.
Treat failure as a learning experience.

Live life with no regrets.
Remembering…There is no undo button.

Congratulations again to you all…and thank you very much.

The Apprentice – Entrepreneur Version

We are all apprentices in a craft where no one ever becomes a master
Ernest Hemingway

Silicon Valley is built on simple myths – one of the most pervasive is that all winning startups are founded straight out of school by 20 year olds from Stanford or Harvard. The reality is these are the exceptions not the rule.

Too Old at 30?
I was having coffee with an ex-student at the ranch, watching our bobcat hunt in the front lawn. This student had called and said he had to meet  - “I’m having a career crisis,” was how he described it. I invited him to make the drive down.

As the story unfolded, it turned out that he just turned 30 and realized that he hadn’t founded a company yet. “Everyone now starts a company out of school. All my classmates who were interested in entrepreneurship have started their own companies. I’ve just been working my way up the ladder.” He explained that he had a progressively set of better jobs at companies that were in the “build” phase. These ex-startups had found a repeatable business model and were putting the processes in place to grow into a large company. They had hired operating executives and were starting to scale.

“Well what’s wrong with what you’ve been doing?” I asked. “Oh, I’ve learned a ton,” he replied. “If I had started a company out of school I would have made all kind of stupid mistakes.”

Ok I wondered, the problem is what? “So how have your friends done?” We watched as the bobcat patiently stalked a gopher. “Hmm” he said,  ”A few did ok, but most of them cratered their startups. For the amount of money they made most of them would have been better off working at Walmart.”

Slow Learner
I told him he wasn’t alone. Early in my career I apprenticed at companies that had recently been startups, hadn’t yet gone public and were still innovative. My career was a slow 20-year progression from training instructor to product marketing manager to VP of Marketing. It wasn’t until my 7th startup that I was a CEO in a startup I co-founded (and its failure left a crater so deep it had it’s own Iridium layer.)

Perhaps the most important part of this non-metoric career trajectory was the mentoring I received. I managed to work for, with, and around people who were truly skilled at what they did. Some of them consciously taught and shared their skills. For others I tried my best to suck out every bit of what they knew and emulate the best of their skills. (At times the learning was painful, but it was never forgotten.)

While the Silicon Valley myth is that all winning startups are founded straight out of school it’s just not true.

No Longer a Startup
In raw numbers, most engineers and MBA’s aren’t founding companies, they’re going to work for others who have; Facebook, Google, Zynga, Four Square, Twitter, etc. While the jobs at these companies are still incredibly challenging, and passion and innovation may still pervade their company cultures, the startup risk (“will we run out of money before we find our customers?”) is gone. As great as these companies may be, they are no longer startups. (A startup is a temporary organization searching for a repeatable and scalable business model.)

But employees in these ex-startups are getting the best hands-on education for entrepreneurship there is – as apprentices.

Apprentice
As we watched the bobcat make a meal out of the gopher I offered that his career was proceeding just fine. Someday, he’ll hear a calling, pull his head out of his computer, look around and say, “I can do this myself.”

And the cycle of creative destruction will begin anew.

Lessons Learned

  • Not all startups are founded by 20-somthings straight out of college
  • Working for companies that were recently startups is a great way to apprentice
  • These companies can you give a lifetime of mentorship hard to achieve in other ways
  • When you’re ready you’ll hear a calling, and it won’t be a job

Mentors, Coaches and Teachers

When the student is ready, the master appears.
Buddhist Proverb

Lots of entrepreneurs believe they want a mentor. In fact, they’re actually asking for a teacher or a coach. A mentor relationship is a two-way street. To make it work, you have to bring something to the party.

A Question from the Audience
Recently when I was at a conference taking questions from the audience, I got a question that I had never heard before. Someone asked, “How do I get you, or someone like you to become my mentor?” It made me pause (actually cringe.) As I gathered my thoughts, I realized that I’ve never thought much about the mentors I had, how I got them, and the difference between mentors, coaches and teachers.

Teachers
What I do today is teach. At Stanford and Berkeley, I have students, with classes and office hours. For the brief time in the quarter I have students in my class, at worst I impart knowledge to them. At best, I try to help my students to discover and acquire the knowledge themselves. I try to engage them to see the startup world as part of a larger pattern; the lifecycle of how companies are born, grow and die. I attempt to offer them both theory, as well as a methodology, about building early stage ventures. And finally, I have them experience all of this first hand by teaching them theory side-by-side with immersive hands-on using Customer Development to find a business model.

At times, the coffees, lunches and phone calls I have with current and past students are also a form of teaching. Most of the time students come with, “Here’s the problem I have. Can you help me?” Usually, I’ll give a direct answer, but sometimes my answer is a question.

In both cases, inside or outside the classroom, I consider those activities as teaching. At least for me, mentorship is something quite different.

Mentors
As an entrepreneur in my 20’s and 30’s, I was lucky to have four extraordinary mentors, each brilliant in his own field and each a decade or two older than me. Ben Wegbreit taught me how to think, Gordon Bell taught me what to think about, Rob Van Naarden taught me how to think about customers and Allen Michels showed me how to turn thinking into direct, immediate and outrageous action.

At this time in my life, I was the world’s biggest pain in the rear, lessons needed to be communicated by baseball bat, yet each one of these people not only put up with me, but also engaged me in a dialog of continual learning. Unlike coaching, there was no specific agenda or goal, but they saw I was competent and open to learning and they cared about me and my long-term development. I’m not sure it was a conscious effort on their part, (I know it wasn’t on mine,) but it continued for years, and in some cases (with my partner Ben Wegbreit) for decades. What is interesting in hindsight is that although the relationship continued for a long time, neither of us explicitly acknowledged it.

Now I realize that what made these relationships a mentorship is this: I was giving as good as I was getting. While I was learning from them – and their years of experience and expertise – what I was giving back to them was equally important. I was bringing fresh insights to their data. It wasn’t that I was just more up to date on the current technology, markets or trends, it was that I was able to recognize patterns and bring new perspectives to what these very smart people already knew. In hindsight, mentorship is a synergistic relationship.

Like every good student/teacher and mentor/mentee relationship, over time the student became the teacher, and this phase of relationship ends.

How Do I Find A Mentor
All this was running through my head as I tried to think of how to answer the question from the audience.

Finally I replied, “At least for me, becoming someone’s mentor means a two-way relationship. A mentorship is a back and forth dialog – it’s as much about giving as it is about getting. It’s a much higher-level conversation than just teaching. Think about what can we learn together?  How much are you going to bring to the relationship?”

If it’s not much, than what you really want/need is a teacher, not a mentor. If it’s a specific goal or skill you want to achieve, hire a coach, but if you’re prepared to give as good as you get, then look for a mentor.

But never ask. Offer to give.

Lessons Learned

  • Teachers, coaches and mentors are each something different.
  • If you want to learn a specific subject find a teacher.
  • If you want to hone specific skills or reach an exact goal hire a coach.
  • If you want to get smarter and better over your career find someone who cares about you enough to be a mentor.

Risk and Culture in Silicon Valley

Om Malik runs Gigaom, probably the most interesting and accurate site on the blogosphere.

Om was kind enough to have me in for an interview. We covered a wide range of topics. This talk on Risk and Culture in Silicon Valley is a small  1 minute snippet of a longer interview on his blog.

Entrepreneurs Are Artists

I wrote about entrepreneurs as artists in a previous post.

The FounderLy team interviewed me and got me to give a better explanation of what I was trying to say in this 2 minute video clip.

If you can’t see the video click here.

Entrepreneurship is an Art not a Job

Some men see things as they are and ask why.
Others dream things that never were and ask why not.
George Bernard Shaw

Over the last decade we assumed that once we found repeatable methodologies (Agile and Customer Development, Business Model Design) to build early stage ventures, entrepreneurship would become a “science,” and anyone could do it.

I’m beginning to suspect this assumption may be wrong.

Where Did We Go Wrong?
It’s not that the tools are wrong, I think the entrepreneurship management stack is correct and has made a major contribution to reducing startup failures. Where I think we have gone wrong is the belief that anyone can use these tools equally well.

Entrepreneurship is an Art not a Job
For the sake of this analogy, think of two types of artists: composers and performers (think music composer versus members of the orchestra, playwright versus actor etc.)

Founders fit the definition of a composer: they see something no one else does. And to help them create it from nothing, they surround themselves with world-class performers. This concept of creating something that few others see – and the reality distortion field necessary to recruit the team to build it – is at the heart of what startup founders do. It is a very different skill than science, engineering, or management.

Entrepreneurial employees are the talented performers who hear the siren song of a founder’s vision. Joining a startup while it is still searching for a business model, they too see the promise of what can be and join the founder to bring the vision to life.

Founders then put in play every skill which makes them unique – tenacity, passion, agility, rapid pivots, curiosity, learning and discovery, improvisation, ability to bring order out of chaos, resilience, leadership, a reality distortion field, and a relentless focus on execution – to lead the relentless process of refining their vision and making it a reality.

Both founders and entrepreneurial employees prefer to build something from the ground up rather than join an existing company. Like jazz musicians or improv actors, they prefer to operate in a chaotic environment with multiple unknowns. They sense the general direction they’re headed in, OK with uncertainty and surprises, using the tools at hand, along with their instinct to achieve their vision. These types of people are rare, unique and crazy. They’re artists.

Tools Do Not Make The Artist
When page-layout programs came out with the Macintosh in 1984, everyone thought it was going to be the end of graphic artists and designers. “Now everyone can do design,” was the mantra. Users quickly learned how hard it was do design well (yes. it is an art) and again hired professionals. The same thing happened with the first bit-mapped word processors. We didn’t get more or better authors. Instead we ended up with poorly written documents that looked like ransom notes. Today’s equivalent is Apple’s “Garageband”. Not everyone who uses composition tools can actually write music that anyone wants to listen to.

“Well If it’s Not the Tools Then it Must Be…”
The argument goes, “Well if it’s not tools then it must be…” But examples from teaching other creative arts are not promising. Music composition has been around since the dawn of civilization yet even today the argument of what “makes” a great composer is still unsettled. Is it the process (the compositional strategies used in the compositional process?) Is it the person (achievement, musical aptitude, informal musical experiences, formal musical experiences, music self-esteem, academic grades, IQ, and gender?)  Is it the environment (parents, teachers, friends, siblings, school, society, or cultural values?) Or is it constant practice (apprenticeship, 10,000 hours of practice?)

It may be we can increase the number of founders and entrepreneurial employees, with better tools, more money, and greater education. But it’s more likely that until we truly understand how to teach creativity, their numbers are limited.

Lessons Learned

  • Founders fit the definition of an artist: they see – and create– something that no one else does
  • To help them move their vision to reality, they surround themselves with world-class performers
  • Founders and entrepreneurial employees prefer operating in a chaotic environment with multiple unknowns
  • These type of people are rare, unique and crazy
  • Not everyone is an artist

A Visitors Guide to Silicon Valley

If you’re a visiting dignitary whose country has a Gross National Product equal to or greater than the State of California, your visit to Silicon Valley consists of a lunch/dinner with some combination of the founders of Google, Facebook, Apple and Twitter and several brand name venture capitalists. If you have time, the President of Stanford will throw in a tour, and then you can drive by Intel or some Clean Tech firm for a photo op standing in front of an impressive looking piece of equipment.

The “official dignitary” tour of Silicon Valley is like taking the jungle cruise at Disneyland and saying you’ve been to Africa. Because you and your entourage don’t know the difference between large innovative companies who once were startups (Google, Facebook, et al) and a real startup, you never really get to see what makes the valley tick.

If you didn’t come in your own 747, here’s a guide to what to see in the valley (which for the sake of this post, extends from Santa Clara to San Francisco.) This post offers things to see/do for two types of visitors: I’m just visiting and want a “tourist experience” (i.e. a drive by the Facebook / Google / Zynga / Apple building) or “I want to work in the valley” visitor who wants to understand what’s going on inside those buildings.

I’m leaving out all the traditional stops that you can get from the guidebooks.

Hackers’ Guide to Silicon Valley
Silicon Valley is more of a state of mind than a physical location. It has no large monuments, magnificent buildings or ancient heritage. There are no tours of companies or venture capital firms. From Santa Clara to South San Francisco it’s 45 miles of one bedroom community after another. Yet what’s been occurring for the last 50 years within this tight cluster of suburban towns is nothing short of an “entrepreneurial explosion” on par with classic Athens, renaissance Florence or 1920’s Paris.

California Dreaming
On your flight out, read Paul Graham’s essays and Jessica Livingston’s Founders at Work. Then watch the Secret History of Silicon Valley and learn what the natives don’t know.

Palo Alto – The Beating Heart 1
Start your tour in Palo Alto. Stand on the corner of Emerson and Channing Street in front of the plaque where the triode vacuum tube was developed. Walk to 367 Addison Avenue, and take a look at the HP Garage. Extra credit if you can explain the significance of both of these spots and why the HP PR machine won the rewrite of Valley history.

Walk to downtown Palo Alto at lunchtime, and see the excited engineers ranting to one another on their way to lunch. Cram into Coupa Café full of startup founders going through team formation and fundraising discussions. (Noise and cramped quarters basically force you to listen in on conversations) or University Café or the Peninsula Creamery to see engineers working on a startup or have breakfast in Il Fornaio to see the VC’s/Recruiters at work.

Stanford – The Brains
Drive down University Avenue into Stanford University as it turns into Palm Drive. Park on the circle and take a walking tour of the campus and then head to the science and engineering quad. Notice the names of the buildings; Gates, Allen, Moore, Varian, Hewlett, Packard, Clark, Plattner, Yang, Huang, etc. Extra points if you know who they all are and how they started their companies. You too can name a building after your IPO (and $30 million.) Walk by the Terman Engineering building to stand next to ground zero of technology entrepreneurship. See if you can find a class being taught by Tom Byers, Kathy Eisenhardt, Tina Seelig or one of the other entrepreneurship faculty in engineering.

Attend one of the free Entrepreneurial Thought Leader Lectures in the Engineering School. Check the Stanford Entrepreneurship Network calendar or the BASES calendar for free events. Stop by the Stanford Student Startup Lab and check out the events at the Computer Forum.  If you have time, head to the back of campus and hike up to the Stanford Dish and thank the CIA for its funding.

Mountain View – The Beating Heart 2
Head to Mountain View and drive down Amphitheater Parkway behind Google, admiring all the buildings and realize that they were built by an extinct company, Silicon Graphics, once one of the hottest companies in the valley (Shelley’s poem Ozymandias should be the ode to the cycle of creative destruction in the valley.) Next stop down the block is the Computer History Museum. Small but important, this museum is the real deal with almost every artifact of the computing and pre-computing age (make sure you check out their events calendar.) On leaving you’re close enough to Moffett Field to take a Zeppelin ride over the valley. If it’s a clear day and you have the money after a liquidity event, it’s a mind-blowing trip.

Next to Moffett Field is Lockheed Missiles and Space, the center of the dark side of the Valley. Lockheed came to the valley in 1956 and grew from 0 to 20,000 engineers in four years. They built three generations of submarine launched ballistic missiles and spy satellites for the CIA, NSA and NRO on assembly lines in Sunnyvale and Palo Alto. They don’t give tours.

While in Mountain View drive by the site of Shockley Semiconductor and realize that from this one failed company, founded the same year Lockheed set up shop, came every other chip company in Silicon Valley.

Lunch time on Castro Street in downtown Mountain View is another slice of startup Silicon Valley. Hang out at the Red Rock Café at night to watch the coders at work trying to stay caffeinated. If you’re still into museums and semiconductors, drive down to Santa Clara and visit the Intel Museum.

Sand Hill Road – Adventure Capital
While we celebrate Silicon Valley as a center of technology innovation, that’s only half of the story. Startups and innovation have exploded here because of the rise of venture capital. Think of VC’s as the other equally crazy half of the startup ecosystem.

You can see VC’s at work over breakfast at Bucks in Woodside, listen to them complain about deals over lunch at Village Pub or see them rattle their silverware at Madera. Or you can eat in the heart of old “VC central” in the Sundeck at 3000 Sand Hill Road. While you’re there, walk around 3000 Sand Hill looking at all the names of the VC’s on the building directories and be disappointed how incredibly boring the outside of these buildings look. (Some VC’s have left the Sand Hill Road womb and have opened offices in downtown Palo Alto and San Francisco to be closer to the action.) For extra credit, stand outside one of the 3000 Sand Hill Road buildings wearing a sandwich-board saying “Will work for equity” and hand out copies of your executive summary and PowerPoint presentations.

Drive by the Palo Alto house where Facebook started (yes, just like the movie) and the house in Menlo Park that was Google’s first home. Drive down to Cupertino and circle Apple’s campus. No tours but they do have an Apple company store which doesn’t sell computers but is the only Apple store that sells logo’d T-shirts and hats.

San Francisco – Startups with a Lifestyle
Drive an hour up to San Francisco and park next to South Park in the South of Market area. South of Market (SoMa) is the home address and the epicenter of Web 2.0 startups. If you’re single, living in San Francisco and walking/biking to work to your startup definitely has some advantages/tradeoffs over the rest of the valley. Café Centro is South Park’s version of Coupa Café. Or eat at the American Grilled Cheese Kitchen. (You’re just a few blocks from the S.F. Giants ballpark. If it’s baseball season take in a game in a beautiful stadium on the bay.) And four blocks north is Moscone Center, the main San Francisco convention center. Go to a trade show even if it’s not in your industry.

The Valley is about the Interactions Not the Buildings
Like the great centers of innovation, Silicon Valley is about the people and their interactions. It’s something you really can’t get a feel of from inside your car or even walking down the street. You need to get inside of those building and deeper inside those conversations. Here’s a few suggestions of how to do so.

  • If you want the ultimate startup experience, see if you can talk yourself into carrying someone’s bags as they give a pitch to a VC.  Be a fly on the wall and soak it in.
  • If you’re trying to get a real feel of the culture, apply and interview for jobs in three Silicon Valley companies even if you don’t want any of them. The interview will teach your more about Silicon Valley company culture and the valley than any tour.
  • Go to at least three tech-oriented Meetups or Plancast events in the Valley or San Francisco (Meetup is a deep list. Search for “startup” meetup’s in San Francisco, Palo Alto and Santa Clara.)
  • If you’re visiting to raise money or to get to know “angels” use AngelList to get connected to seed investors before you arrive.
  • Never leave.

Startups – So Easy a 12 Year Old Can Do It

Out of the mouths of babes. Maybe because it’s a company town and everyone in Silicon Valley has a family connection to entrepreneurship. Or maybe I just encountered the most entrepreneurial 12 year olds ever assembled under one roof. Or maybe we’re now teaching entrepreneurial thinking in middle schools. Either way I had an astounding evening as one of the judges at the Girls Middle School 7th grade Entrepreneurial night.

12 Year Olds Writing Business Plans
In this school every seventh-grade girl becomes part of a team of four or five who create and run their own business. The students write business plans, request start-up capital from investors, receive funding for their companies, make product samples, manufacture inventory, and sell their products to real-world customers. This class is experiential learning at its best.

It was amazing to read their plans talking about income, revenue, cost of goods, fixed and variable costs, profit and liquidity. (Heck, I don’t think I understood cost of goods until I was 30.) As they built their business, having to work with a team meant the girls learned firsthand the importance of creativity, teamwork, communication, consensus-building, personal responsibility, and compromise. (Next time I have to adjudicate between founders in a real startup I can now say, “I’ve seen 12 year olds get along better than you.”)

One highlight of the girls Entrepreneurial Program is the annual “Entrepreneurial Night” that showcases the newly created businesses for both the school and the wider Silicon Valley community. All of the teams had booths where they sold their products as if in a trade show. Then after a break, each of the 12 teams of 7th graders got up in front of the audience of several hundred (and the judges) and presented Powerpoint summary of their business and progress to date. (I couldn’t write or deliver a pitch that good until my third startup.)

Wow.

(Watching these girls gave me even more confidence about predictions of the future of entrepreneurship in the post When It’s Darkest, Men See the Stars.)

Women as Entrepreneurs
Teaching entrepreneurship in middle school is an amazing achievement. But teaching it to young women is even better. Not all these girls will choose to be career professionals in a corporate world. But learning entrepreneurial thinking early can help regardless of your career choice, be it teacher, mother, doctor, lawyer or startup founder. They will forever know that starting a company is not something that only boys do, but was something they mastered in middle school.

The Girls Middle School is not alone in teaching young students entrepreneurship. Organizations like Bizworld and The National Foundation for Teaching Entrepreneurship are also spreading the word. If you have any influence on the curriculum of your childrens’ school, adding an entrepreneurship class will be good for them, good for your community and great for our country.

Lessons Learned

  • Middle school is a great time to introduce entrepreneurship into a curriculum
  • Students that age can master the basics of a small business
  • It’s best taught as a full immersion, “get out of the building, make it, sell it and do it” experience
  • The lessons will last a lifetime
  • Extra credit if you teach it in a girls-only school

Requiem For A Roommate

And, when he shall die, Take him and cut him out in little stars,
And he will make the face of Heaven so fine
That all the world will be in love with night
And pay no worship to the garish sun.
William Shakespeare

Last week I had my “public servant” hat on in my official capacity as a California Coastal Commissioner.  Walking out after a 13-hour hearing, one of my fellow commissioners asked, “Why on earth do we do this?” As I got back to the hotel, I found myself wondering the same thing.  What ever got me interested in public service and non-profits? As I tried to unwind, I turned on the hotel TV and caught part of an old movie, The Big Chill.

It reminded me that I volunteer my time because of a gift I had received my first year in college.

Unshakable Certainty
I had never been outside of New York so to me Michigan seemed like a foreign country. On the first day of college I wandered down my dorm hall introducing myself and met Michael Krzys, the guy who would one day be the best man at my wedding, making a salad on the floor of his room.  I provided the bowl and as we started talking, I was fascinated that he was from Adrian Michigan, a quintessential small town in the Midwest. He was equally curious about someone who grew up in New York. As we got to know each other, I pretty quickly I realized that I had met my match, someone with even more curiosity, creativity and a wry sense of humor.  As best friends our freshman year, we did all the crazy things that first year college students do (things I still won’t tell my kids.)

But as I got to know Michael, there was another, completely foreign part of him I didn’t understand. (It would take me another 30 years.) From the day I met him he had a commitment to public service that was deep, heartfelt, profound, unshakable and to me, mysterious and completely unfathomable. Even as a freshman, Michael already knew that his calling was to help others and to do so he was determined to become a public service lawyer. It confused and unnerved me to know someone with so much certainty about the meaning and direction of his life.  It couldn’t have been more different from mine.

After our first year our lives took different paths. When they would touch again, it would be in ways neither of us could have predicted.

Different Paths
With the Vietnam War going full tilt, I left school and joined the Air Force, spending a year and a half in Southeast Asia. Michael and I kept in touch via letters – me telling him about adventures in the military, fighter planes, electronics and foreign countries. His letters explained to me why I was an idiot, war was immoral and that while he appreciated my dedication to national service, it was public service that was the higher calling. Each of his letters ended with him reminding me that I was destined for a different career.

When I got back from Thailand the war was winding down and Michael was now in the University of Michigan Law School (having finished his undergrad degree in 3-years.) For my last year in the Air Force, I was stationed on a B-52 bomber base, 183 miles from Ann Arbor. I knew the exact mileage as I would drive it every weekend to see my girlfriend and hang out with Michael. Over dinner we’d argue about politics, talk about how to best save the world, and he’d tell me what he was learning that week in his law school classes.  I remember when he taught me the best way to understand an issue was to learn how to argue both sides of a case.

It didn’t take long before he was loaning me his last quarter’s law books to read during the week at the airbase where I was keeping the world safe for democracy.  (While students in law school were hiding their Playboy magazines inside their law books, I’m probably the only guy who had to hide his law books from fellow airmen under a pile of Playboy magazines.)

Remove the Tag
In his last year in law school, the high point for Michael was arguing his first pro bono case in Detroit for a tenant who he claimed was being illegally evicted. (In Michigan law students could appear and practice in limited court settings under the supervision of an admitted attorney.) When I drove down to Ann Arbor that weekend, I was regaled with Michael’s tale of his passionate defense of his first client as he stood in front of the judge waving his arms for effect in his first-ever sports coat. Michael said he was ecstatic that the judge ruled in his favor, but was a bit confused when the judge motioned him to approach the bench.  In a low voice the judge said, “Son, that was a pretty good argument for a law student. However the next time you’re in court, you may want to remove the price tag from the sleeve of your sports coat.”

When I got out of the military and went back to school, Michael was finishing up law school, and a year later he and his new wife headed to the South to work for Georgia Legal Services in McIntosh County in Georgia. I moved to Silicon Valley, and we kept up a sporadic correspondence, me trying to explain startups and Michael telling me about the world of civil rights and equal justice for the poor. If possible it seemed like his excitement for what he was doing matched mine.  I just didn’t understand why he did it.

It’s a Calling
For entrepreneurs, understanding why people dedicate their lives to working for non-profits is hard to fathom. Why work for low pay, on something that wasn’t going to deliver a product that would change the world?

Today, each time I see the staffs of those non-profits where I’m on the board, I get a glimpse of that same passion, commitment and sense of doing right that I first heard my freshman year decades ago.  For the best of them, it’s not a job, it’s a life-long calling.  The executive directors of the Coastal Commission and POST remind me of what Michael might have become.

A Life Worth Living
One fine California April day in 1981, three years in Silicon Valley now into my second startup, I got a call from someone in Michigan who had been trying to track me down.  Michael and his wife were bringing some kids to camp, and he was killed in a head-on car accident with a drunk driver.  His wife and the kids survived.

It took me a long time, but as I got older I realized that life was more than just about work, technical innovation and business. Michael and others worked to preserve and protect the values that made life worth living.  And while we were making things, they were the ones who were who changing our society into a more just place to live.

There isn’t a day that goes by on the Coastal Commission that I don’t wonder what Michael Kryzs would do. To this day he is my model as a human being who found his own compass.

I always hoped that mine would point in the same direction.

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Too Young to Know It Can’t be Done

The young do not know enough to be prudent, and therefore they attempt the impossible – and achieve it, generation after generation.
Pearl S. Buck

Ask people what makes entrepreneurs successful and you’ll hear a familiar list of adjectives; agile, tenacious, resilient, opportunistic, etc.

What you don’t hear is that often they didn’t know any better.

It Can’t Be Done
I was just rereading Jessica Livingston’s book Founders at Work, and a common thread through the stories reminded me that there is a type of technology innovation that occurs in startups when a founder/team simply doesn’t know what they’re attempting is impossible.

Steve Wozniak at Apple building the Apple II floppy disk controller without ever seeing one. The original Fairchild Semiconductor team of Moore and Hoerni racing to build the first silicon diffused PNP and NPN transistors and ending up with Planar transistors and integrated circuits. The list of “I just did it without knowing it was impossible” appears time and again as a common thread in stories about technology innovation.

I got to see this first hand, when I was lucky enough to be present as an incredibly small team designed and built the Zilog and MIPS microprocessors.  And at Ardent I watched an equally minuscule company tackle building a supercomputer and at again at E.piphany building a data warehouse.

Almost all these innovations were built by people in their 20’s with a few of the old-timers in their 30’s. (One of the common themes was the physical effort to get these projects completed –  entrepreneurs staying up for days to finish a project and/or sleeping at work until it shipped.) I flew more red-eyes than I can remember, and also had days where I just slept in the office with the engineers.

Age Means Wisdom
It’s not that older entrepreneurs can’t start or build innovative companies – of course they can. Older entrepreneurs just work smarter and strategically. (Though my hypothesis is that funding from risk capital sources – angels and VC’s- don’t follow a normal distribution curve for older founders.)

And if they’re really strategic older founders hire engineers in their 20′s and 30′s who don’t know what they’ve been asked to do is impossible (exactly the strategy of my partner Ben at E.piphany.)

Older Means You Know Too Much
However, as I’ve gotten older I’ve observed that it’s not just that stamina that changes for entrepreneurs. One of the traps of age is growing to accept the common wisdom of what’s possible and not. Accumulated experience can at times become an obstacle in thinking creatively. Knowing that “it can’t be done” because you can recount each of the failed attempts in the last 20 years to solve the problem can be a boat anchor on insight and imagination. This not only effects individuals, but happens to companies as they age.

When you’re young anything seems possible.

And at times it is.

Lessons Learned

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Boys Rules, Girls Lose – Women at Work

My two daughters are now in college and have put their toes in the working-world with summer jobs. As they’ve grown older, they’ve heard their parent’s advice about women in the workforce.

This post is not advice nor is it a recommendation of what you should do. It’s simply my interpretation of what I observed watching my daughters grow up. Our circumstances were unique, times have changed, and your conclusions and opinions will most certainly differ.

Gender Differences
Growing up in the 60’s and 70’s when women were struggling against inequality in jobs, pay, etc., my wife and I came into parenthood with an unconscious bias that gender differences were mostly cultural. So how we raised our kids was an unintended science experiment.

When our two girls were toddlers, my wife started dressing them in overalls, and consciously bought them trucks and “boy toys” to play with along with dolls. We were both surprised and bemused to see them ignore the trucks and cars and prefer to play house. A bit later, our biggest eye-opener was when our younger daughter started asking for the “pretty pink dresses” instead of the overalls. (Given they didn’t watch TV, we ruled that out as a major role in their choices.) We started to believe that perhaps there was some hard-wiring about gender.

Boys With Sticks
As our kids reached grade school, the next lesson was watching them at play. I remember hiking with my girls and two 8-year old boys. When we stopped for lunch, the boys found sticks and immediately began a sword fight. When they tired of that, the boys chased each other and wrestled until they were exhausted. The girls, finding their pile of sticks, began building something together and telling each other stories. The suggestion of “why don’t you guys try each others games?” was met with utter 8-year old disdain. I realized I was looking at something – competition versus collaboration – that also seemed hard-wired. (Competition versus collaboration is my shorthand for a much longer set of gender-linked behaviors.)

Boys Rules, Girls Lose
When I entered the business world, I quickly found that office politics was just an older version of boys with sticks. The testosterone level was higher, and the game was more like musical-chairs with winners and losers until there was a single person on top. As a guy I didn’t need a rulebook to understand the game; there was a hierarchy, it was competitive, I win you lose.

It took me awhile but I realized that implicitly that advancement in corporations was unconsciously constructed around how men interact with each other. And unless they consciously work at it, most companies are not set up for collaboration.

As I grew older I realized that women in the workplace around me were having a harder time than the guys. They’d all come from college equally ambitious, but only after a few years, something different was happening to their careers.

Over time, I observed women who succeeded in the business world (as defined by their interest in moving up the hierarchy) headed in one of four career directions:

  1. They chose departments within corporations where collaboration was an asset like Public Relations, HR, customer service, etc.
  2. They set up their own companies to provide services and ran their own companies collaboratively.
  3. They opted out of the workplace and raised a family, returning later.
  4. They figured out the “boys rules” and followed them (having to work harder and smarter to prove that they were.)

Understand There Are Rules – And They’re Not Yours
When my girls started to play soccer, I used to remind them, “Make sure the people on the field aren’t carrying sticks because if they’re playing field hockey while you’re playing soccer, you’re going to get hurt.” As they got older, they understood I wasn’t only talking about sports but that I was trying to teach them how to figure out the rules of any game they were about to play.  And that included the workplace.

My advice to our daughters about women in the workplace has been pretty simple:

  • The language of business is about winners and losers. Bosses who read Sun Tzu’s “The Art of War” as a guide to business strategy or “Leadership Secrets of Attila the Hun” are unlikely to create a culture of collaboration.
  • There are implicit rules of competition and collaboration in companies.  It’s not that anyone is hiding a secret rulebook; it’s just that no one has articulated the rules.
  • In most companies men set these rules. Again, nothing secret here, but men don’t realize that they behave and think differently. They don’t have to explain the rules to other men so it never occurs to them to explain the rules to women.
  • As women, they will be expected to perform to boys rules as defined in their workplace: This means they need to spend the time understanding what the rules are in their company and industry. If they don’t, they will find others less competent but more adept at playing the game getting promoted instead of them.
  • Women can be equally competitive if they desire. It’s not a question of competency. Or a skill only boys have. If they want to succeed by competing they can. They just have to learn the rules and practice them.
  • Find mentors then become one. In every organization or industry there’s someone who’s figured out the rules. Seek them out and know what they know. By the time you do, it’s your turn to mentor someone else.
  • Collaboration can make you a stronger competitor. The irony is that organizations which collaborate are more effective competitors. When they reach a position of authority, use their instincts to build a fearsome organization/company.
  • If they prefer to collaborate and don’t want to play by boy’s rules, they need to understand what their career choices are. There are plenty of other ways to be a productive member of society other than a position on a corporate org chart.
  • Understanding the rules and career options doesn’t mean the rules are right or they have to accept them as the only career choices.  They can make change happen if they so desire. But they need to understand the personal costs of doing so.
  • Some find the idea of gender differences uncomfortable. Having fought to have men and women be treated equally, discovering that there may be gender specific hard-wiring for behavior sets up cognitive dissonance. Some simply won’t accept that there are workplace gender differences.
  • I may be wrong. Perhaps I misunderstood what I’ve seen or that time has changed the workplace significantly. Take this advice as a working hypothesis and see if it matches your experience.

Time will tell whether we gave our daughters good advice.

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Entrepreneurial Finishing School – Should I Get an MBA?

I usually hear the “Should I get my MBA?” question at least once a month.

If you’re an entrepreneur, the glib answer is “no.”  It’s also the wrong answer.

Should I Get My MBA?
Last week I was having coffee with an ex engineering student of mine now on his second startup (and for a change it wasn’t a Web 2.0 startup) who wanted to chat about career choices.  “I’m thinking of going back to school to get my MBA.”  It was said less as a clear declaration than a question. It was six years since he had left school and three and a half years ago he had joined an 8-person startup as a product manager. The company was now 4-years old and 70+ people, profitable and growing fast.

I didn’t say anything as he continued, “I’m now director of product management, but I think I’m missing stuff I ought to know; finance, marketing, and operations management. We’re starting to hire senior execs as VP’s and all the jobs specs have “MBA” as a requirement.  What should I do?’

The easy answer would have been, “Yes, go back and get an MBA. You fit the perfect profile; you have an engineering background, work experience in two startups and you’ll be limited in your career growth without one.”  But the answer I gave him was a bit different.

Where Do You Fit?
In between the coffee and breakfast I drew this diagram:

I explained that as startups grow, they go from the box on the left to the box on the right and the skills people need at each step of a company’s growth evolve and change. The skills required when they were an 8-person startup trying to “search for the business model” wasn’t the same set of skills needed now that they were  a 70-person company “executing the business model.”  I offered that it sounded to me as if his company was going through the transition (the box in the middle) where it was starting to put in place the processes needed to build and execute the business model.

Who Are You?
I suggested that perhaps his first question shouldn’t be whether he needed an MBA. Rather the question he should be thinking of was: in which part of a company’s lifecycle did he think he wanted to spend the rest of his career?  Did he enjoy the early chaotic stage of the startup?  Was he fondly telling stories of how much better it was when the company was smaller? After the rocketship ride of this successful startup, did he now want to be a founder of his own startup?

Or was he more comfortable now that there was more structure, repeatability and he was managing a staff? Was his goal to be a large company executive managing large groups of people?  And if a larger company was his destination, did he want to manage complex technology projects or did he see himself in more general management in sales, marketing or finance?

His vision about the trajectory of his career would answer what type of education he should get – and where he might get it.

MBA or Engineering Management?
I pointed out that if he wanted to work in a larger company he actually had two choices – go to business school for an MBA degree or go back to a graduate school of engineering for a Engineering Management degree.  (I find a disconcerting number of my MBA students with engineering backgrounds realized too late that they ought to have been in an engineering management program. They had picked the MBA route because it was trendy or they hadn’t thought through that managing engineering projects was what really excited them.)

Why Yes I Am an Entrepreneur
I could see I was having an effect when he blurted out, “You know my happiest times in these startups were when we were a small team figuring out the business model. The chaos and camaraderie gave me an adrenalin rush and incredible satisfaction. While I’m really good at managing the process, this phase of the company feels like a job. I’ve been bouncing some ideas about a company with some fellow employees who feel the same way. Maybe I do want to do startups as a career.”

Then he asked me the real hard question. “So what type of graduate school do I go to get the skills to be a great entrepreneur?”

Entrepreneurial Apprenticeship
I congratulated him.  “You already have started your apprenticeship. You have two startups under your belt as one of the first 10 employees. If you decide that you want to be a founder of a startup you’ve made a good start.”  “But where do I learn all the things a founder needs to know, not just an early employee? Team building? Creativity and innovation? Entrepreneurial finance? Agile Development? This Lean startup stuff?  Where’s the school for that?”

I said, “Welcome to the wondeful world of entreprenurial education.  It’s everywhere and nowhere.”

E-School versus B-School
Almost all business schools now have entrepreneurship programs or departments. (At U.C. Berkeley that’s exactly the program I teach in.) But you can also find entrepreneurship programs in most engineering schools. (At Stanford that’s the program I teach in as well.)

And startup “accelerators” like Y-Combinator, Techstars, etc. also offer a crash course in Darwinian education. I also pointed out, “If your passion is starting your own company, learning by doing is an equally viable choice.”

MBA? Engineering Management program? Startup accelerators? Just do it?  He had more choices than most.  But first…

Who was he?

And who did he want to be?

Lessons Learned

  • Where do you want to work: startups, mid-size or large companies?
  • If large companies, what do you want do: engineering management or corporate management?
  • If you find yourself debating the “startup versus large company” choice you’ve already chosen the big company.  Entrepreneurship isn’t a career choice it’s a passion and obsession.

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Emulating Empathy

One of the hardest problems for engineers in founding roles in a startup is interacting with customers up close and personal. Over the years I’ve found the best way to learn to do this is by emulating empathy.

The Problem
I was having dinner in Palo Alto with some of my Stanford engineering students and one of the subjects they were most interested in talking about was “how do you really get out of the building and talk to customers.”  Listening to them reminded me how terribly painful it had been for me.

Data Driven
I was always curious about technology and how things worked, but early in my career, this curiosity didn’t extend to people. I was more comfortable with data.

In my first company, ESL, I sat in secure locations and taught complex intelligence gathering systems to a classroom of maintenance and/or operations students. I was essentially responsible for imparting a fire hose of technical information efficiently. At my next company, Zilog, it was the same – I taught microprocessor system design to engineers. It was all about the efficient transfer of knowledge. High bandwidth, low noise.

But later at Zilog I moved into marketing. While I learned how to write data sheets, product marketing at Zilog was very little “listen to customers” and much more “talk at customers.”  It wasn’t until my next company, Convergent Technologies, that I began to understand the value of customer interaction.  As a product marketing manager, I traveled to customers at the behest of our sales people to impart the latest technical wisdom from the factory. Traveling with these salesmen was eye opening – they were comfortable having conversations with strangers and knew how to build rapport, relationships and trust. These guys explained to me that most people were happy to talk about themselves. My job was just to get the conversation started. Our products improved as our salesmen made customers comfortable enough to share their needs and issues. (As I would find out, every one of these salesmen had been design engineers in their past.  Yet most of the time, they artfully hid how much they knew.)

Emulation
I began to understand that while my brain was wired to dive into technical minutia and exchange product information at high speed, this wasn’t what most potential customers (and most people who had a modicum of social skills) wanted to do. In fact, unbelievably (to me) most people would trade valuable time in a meeting for social niceties.

Although these social cues were something that still didn’t come naturally to me, I concluded that to get much further in my career, I was going to have to have to learn. Over time, I watched how the best sales people did it and emulated their behavior. I learned how to smile, shake hands, make eye contact rather than stare at my shoes, talk about sports, ask customers about their jobs, their families, etc. and evidence apparent interest in people I didn’t know way before we got to chat about products. I’d even go out to lunch or dinner and manage to hold a conversation. The two hardest things to learn were: how to speak in front of a group and to make “cold calls” by myself. (Every once in awhile I’d run into a customer wired like me who’d say, “Can we cut the chatter and get down to business?” I’d laugh, and we’d do a high-speed data transfer.)

Surprisingly, I learned that listening to customers and others made me more creative. My best ideas started coming from brainstorming with others, something just not possible when communication was a one-way street.

Fast forward a few companies – MIPS and Ardent – I was still learning (at times painfully) to appreciate that facts were outside the building and not between my ears. After a decade in Silicon Valley, I had finally learned to emulate empathy.

Emulating Empathy
By the time I got to SuperMac, the transformation had taken hold. It was here that I began to teach others what I had learned.

I had inherited a manager of technical marketing, much smarter than me but with zero instinct or feel for customers. He was completely data driven, and our sales department wanted him nowhere near customers. I felt like I had just met my doppelganger from ten years ago. We established that his world view was not shared by most customers. And he understood that if he wanted a bigger role in marketing, he was going to have to change. So I ran the first of what would be many “how to emulate empathy” classes.

I described how getting closer to customers was at first going to be a cerebral rather than gut activity. With no instinct to guide him, he would have to consciously precompute what kind of response each situation called for and play them back when appropriate. He was going to have to sign up for public speaking classes. He was going to go on the road with our sales people, but this time he was going to have to watch what they do and start to copy them. I found him a mentor in a salesman who appreciated his technical skill and was willing to let him tag along.

As expected, the first couple of months was tough – on him, sales and customers. We’d debrief after many of his road trips and calls and course correct as necessary.  (At times I’d feel like I was talking to some earlier version of myself.) But by the end of the year, he had learned enough that the VP of Sales asked whether he could move permanently into a presales support role.

Repeatability
Over the next ten years in startups, I repeated this process with others. Today I remind my engineering students that empathy, while seemingly a foreign language, is possible to learn.

As for me, what I had emulated became second nature. Most of the time I can’t tell which mode is running.

Lessons Learned

  • Customer metrics are not the same as customer interaction.
  • Customer interaction is necessary for startup founders.
  • For some it is extremely difficult.
  • If it’s not instinctual customer empathy is a skill that can be taught and learned.

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Incentives and Legends

Entrepreneurs and the early startup team all need to be motivated by a shared vision, passion and desire to build a large company.  Yet it’s the company legends that live on.

Fund Raising
Our little startup was less than a year-old.  We had been busy assembling our team and had just hired the last member of our exec staff.  We had also just closed our Series B financing with a major overseas partner.  The financing felt like a real validation of our strategy. In truth, it was only proof that our reality distortion field worked in Asia as well.

My Wife Thinks I Deserve a Bonus
One of the new hires was Bob, my VP of Business Development.  He knew so little about technology that I used to say he needed a manual to operate a light switch, but I hired him because a small voice said, “He’ll do extraordinary things.”

He did.  And still does.

Bob, among other things ran the fundraising for us in Asia and worked with an outside firm that had great connections in Japan to drag us around Tokyo and get the deal closed.  As in raising $10Million dollars kind of closed.

Everyone at our startup was working on startup starvation salaries, and Bob had taken a large pay cut to join us. When the Japanese partner deal was done, Bob said,  “Steve, I deserve at least a $10,000 bonus.  I haven’t been home in weeks, and I pulled off a financing even you admit was unbelievable.”

I patiently explained that this type of miraculous event was the norm for startups. The engineers were pulling off miracles on a daily basis, we were all taking fumes for salaries, but our payoff will be when our stock is worth something.  Until then, tell your wife you’ll get $10,000 when hell freezes over. No bonuses in a startup. To his credit Bob said while he understood, he was going to hear about it at home for not being appreciated.

Dinner
Since our management team hadn’t met each others’ spouses, I thought the financing would be a great reason to get everyone together for a low key celebratory dinner.  We picked a restaurant in Palo Alto down the street from the company and got a private room.

We drank lots of wine, had a nice dinner and after the dinner plates had been cleared I made a speech about teamwork, startup, passion, commitment, blah, blah.

I then congratulated the outside firm that Bob had used in Japan. I had invited their CEO and his wife and handed him a check for their retainer bonus for their help in the deal. Bob kept glancing at his wife who was giving him frosty looks and was very clearly not happy.

The New Briefcase
I then announced that it was unfair that Bob shouldn’t go unrecognized for his hard work so I had an award for him as well. The atmosphere around Bob’s wife began to thaw.  I said, “Bob had carried the same old beat up leather briefcase he had since law school and I knew he wouldn’t trade it for anything but I think its time he had something more professional looking.  So Bob, on behalf of the company, we bought you a new briefcase.”

The look on both Bob’s face and his wife’s went from happy to disbelief, to “I can’t believe you’re working for this idiot” on his wife’s face to “I can’t believe I work for this idiot” on Bob’s face.

I said, “Your new briefcase is under the table by your feet.  Why don’t you just put it on the table.”  Bob rooted around a bit and found the briefcase and put it on the table. It was the ugliest and cheapest briefcase you will ever see.

Everyone was now looking slightly embarrassed, all thinking that perhaps they had the most obtuse CEO in Silicon Valley. I thought Bob’s wife was going to throw a steak knife across the table.  I made another speech about how great Bob was and then sat down and said, “Lets get the waiter for coffee and desert.”

The ugly briefcase with its implicit statement sat on the table virtually steaming.

Legend
“Oh, one more thing,” I said.  “Bob, can you open up the briefcase and dump the papers on the table. We should clear out the stuffing so you can put your papers from your old briefcase in it.”

With almost an audible sigh, Bob unlatched the briefcase, held it upside down over the table and dumped out the contents.

In slow motion, dollar bills began to tumble out of the new briefcase.  And they kept coming out.  And they started making a pile of bills in front of Bob and his wife and the rest of the executive staff.

15,000 dollars in dollar bills.

Bob’s wife started crying.

I said, “Extraordinary work in a startup is the norm, but you performed even beyond my expectations. In my startups that’s worth recognizing.”

Rewards for extraordinary effort became part of the company’s legend.

Epilogue
Lest you think only salespeople are motivated by cash in a startup, over the life of the company we sprung the same surprise on engineers who did deliver the impossible. And at Christmas we gave out hundred dollar bills to each employee. While this small token of appreciation would have been dismissed if it had been a check, it had our engineers showing these bills to their friends in other companies.

In three or so years these cash incentives added up to no more than $50K. While everyone understood the theory that we were working to make the stock valuable (and we did,) the cash reminded them that we cared and noticed.

Lessons Learned

  • Cash has a much greater affect than a check.
  • Awards for critical contributions can make a lasting impact.
  • Small amounts spread through the company can be a great motivator.
  • Done correctly it turns incentives into legends.

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The Seven Days of Christmas

I’m sitting next to the fireplace in my favorite chair listening to holiday music, looking at the ocean and making occasional attempts to “help” get ready for Christmas dinner. We went for a hike checking out our new trail signs and playing “spot the bobcat.” Our kids are home for the school break, some friends are visiting from the east coast and we have everything for the holidays but snow on the California coast.

My kids are now almost the age I was long ago at another Christmas.

So This is Christmas
As a 20-year old in Thailand in the middle of the chaos of the Vietnam War, my days were filled being a infinitesimal part of the synchronized machinery of maintaining, arming, and launching row after row of fighter planes parked in their revetments –
F-105 Wild Weasels, F-4’s, A-7’s, as well AC-130 Spectre gunships.

There was something both awe-inspiring and incongruous watching fighter planes with bombs on the wing racks take off two at a time. They would accelerate down the runway with full afterburners with sound you could feel in your chest, climb steeply banking sharply to avoid the towering thunderstorms and seem to fly through double rainbows so bright and beautiful they looked painted on the sky.

While I spent most of my time in an air-conditioned avionics shop, my forays out to the flight-line forever made the smell of JP-4 (jet fuel) an integral part of my life. I still associate the kerosene odor with the ballet-like choreography and precision of hundreds of bomb loaders, pod loaders, start-carts, maintenance crews and the cacophonous sound of dozens of jet engines and fighters purposefully taxiing to the runway. As I look out of the window from a seat of a commercial airplane and see the fuel trucks and baggage carts scurry about, the smell of jet fuel still makes me remember somewhere else.

R&R
Halfway through my tour of duty I got to go on vacation – what the military called R&R (rest and recreation.) All my buddies went to Bangkok or somewhere equally exotic. I decided to go to Ann Arbor Michigan to see my girlfriend. Normally you got 5 days off and then it was time to forget civilian life and get back to the war. Somehow (lost in the mist of time, or perhaps it was because my R&R would occur over the Christmas holidays) I managed to make my R&R 7 days.

One day I was in the middle of Thailand and the next I was hopping space-available military flights to snow-bound Michigan.

So This is Christmas
To my girlfriend Christmas was the high point of her year. Getting off the plane I was in a jet-lagged daze, standing out with very short-hair in a ‘70’s college town, as she met me by at the gate reminding me that having me back was her best Christmas present. As soon as we left the airport we began a 7-day frenzy of a full-immersion Christmas. (All of this was new for me, as I was raised by a single mother who never celebrated holidays- secular or religious, including events like birthdays.)

I still remember some of the things we did; making wrapping paper by tie-dying plain tissue paper, baking Christmas cookies and Gingerbread men and fruitcake. We made our own Christmas ornaments. I even believe, given how little money we had, we made each other our presents. We went caroling in the snow and had Christmas dinner with friends.

Yet with all of that holiday activity the one thing I still remember, the one thing I can still feel after almost 40 years, was regardless of the adventures you have, how important coming home to a family was.

Of all the goals I set in my life coming home to a family was the one I set standing in the snow that Christmas.

Duality of Man
On the flight back I had plenty of time to think of the contradictions of war with the messages of peace, the imperfections of man and the limits of reason.

Merry Christmas and Happy Holidays

From our family to yours.

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