The Startup Team

Individuals play the game, but teams beat the odds
SEAL Team saying

Over the last 40 years Technology investors have learned that the success of startups are not just about the technology but “it’s about the team.”

We spent a year screwing it up in our Lean LaunchPad classes until we figured out it was about having the right team.

Startup Team Lessons Learned
During the last 12 months we’ve taught 42 entrepreneurial teams with 147 students at Stanford, Berkeley, Columbia and the National Science Foundation. (As many teams as most startup incubators.)

Get into the Class
When I first started teaching hands-on, project/team entrepreneurship classes we’d take anyone who would apply. After awhile it became clear that by not providing an interview process we were doing these students a disservice. A good number of them just wanted an overview of what a startup was like – an entrepreneurial appreciation class (and we offer some great ones.) But some of our students hadn’t yet developed a passion for entrepreneurship and had no burning idea that they wanted to bring to market. Yet in class they’d be thrown into a “made-up in the first week” startup team and got dragged along as a spear-carrier for someone else’s vision.

Step One – Set a Bar
So as a first step we made students formally apply and  interview for the Lean LaunchPad class. We were looking for entrepreneurs who had great ideas and interest in making those ideas really happen. We’d hold mixers before the first class and the students would form their teams during week one of the class.

But we found we were wasting a week or more as the teams formed and their ideas gelled.

Step Two – Apply As A Team
So next time we taught, we had the students apply to the class as a team. We hold information sessions a month or more before the classes. Here students with preformed teams could come and have an interview with the teaching team and get admitted. Or those looking to find other students to join their team could mix and market their ideas or join others and then interview for a spot. This process moved the team logistics out of class time and provided us with more time for teaching.

But we had been selecting teams for admission on the basis of whether they had the best ideas. We should have known better.  In the classroom, as in startups, the best ideas in the hands of a B team is worse than a B idea in the hands of a world class team.

Here’s why.

Step Three – Hacker/Hardware, Hustler, Designer, Visionary
As we taught our Lean LaunchPad classes we painfully relearned the lesson that team composition matters as much or more than the product idea. And that teams matter as much in entrepreneurial classes as they do in startups.

In a perfect world you build your vision and your customers would run to buy your first product exactly as you spec’d and built it. We now know that this ‘build it and they will come” is a prayer rather than a business strategy.  In reality, a startup is a temporary organization designed to search for a repeatable and scalable business model. This means the brilliant idea you started with will change as you iterate and pivot your business model until you find product/market fit.

The above paragraph is worth reading a few times.

It basically says that a startup team needs to be capable of making sudden and rapid shifts – because it will be wrong a lot. Startups are inherently chaos. Conditions on the ground will change so rapidly that the original well-thought-out business plan becomes irrelevant.

And finding product/market fit in that chaos requires a team with a combination of skills.

What skills? Well it depends on the industry you’re in, but generally great technology skills (hacking/hardware/science) great hustling skills (to search for the business model, customers and market,) great user facing design (if you’re a web/mobile app,) and by having long term vision and product sense. Most people are good at one or maybe two of these, but it’s extremely rare to find someone who can wear all the hats.

It’s this combination of skills is why most startups are founded by a team, not just one person.

University Silos
While building these teams are hard in the real world, imagine how hard it is in a university with classes organized as silos. Business School classes were only open to business school students, Engineering School classes were only open to engineering school students, etc. No classes could be cross-listed. This meant that you couldn’t offer students an accurate simulation of what a startup team would look like. (In our business school classes we had students with great ideas but lacking the technical skills to implement it. And some of our engineering teams could have benefited from a role-model to follow as a hustler.)

So the next time we taught, we managed to ensure that the class was cross-listed and that the student teams had to have a mix of both business and engineering backgrounds.

I think we’ve finally got the team composition right – relearning all the lessons investors already knew.

But now on to the next goal – getting our mentor program correct.

Lessons Learned

  • Finding product/market fit in startup chaos requires a team with a combination of skills
  • Hacker/Hardware, Hustler, Designer, Visionary
  • At times an A+ market (huge demand, unmet need) may trump all
  • Getting the Mentors right is the next step

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You’ll Be Dead Soon – Carpe Diem

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything – all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important.

Steve Jobs

Watching an entrepreneur fail is sad, but watching them fail from a lack of nerve is tragic.

Excitement
At the beginning of this year Bob, one of my ex-students was in entrepreneurial heaven. He had an idea for a new class of enterprise software insight-as-a-service based on big data web analytics as a Cloud/SaaS (Software As a Service) application.

Bob had taken to heart the business model canvas and Customer Development lessons. After graduating he put together a prototype and had quickly marched through Customer Discovery, iterating his product with the help of CIOs and Fortune 1000 IT departments.

I had made one of the introductions to a Fortune 100 CIO’s so I got to hear his progress from both him and the CIO.

Takeoff
After 90 days, things seemed to be moving at startup speed. Bob had a backlog of users wanting to try his application, and the corporate IT people who were trying his early prototype said, “It’s crude, we hate the user interface, it’s missing lots of features – but we’ll kill you if you try to take it away from us.”

I pointed a VC who followed the space to the CIO who was testing the prototype. The VC told me the CIO wouldn’t get off the phone. He kept telling him he couldn’t remember when he had seen an enterprise software product with so much promise. The VC checked with other IT users and heard the same reaction. It was a “gotta use it, don’t take it away, we’ll have to buy it” product. After a demo and lunch, the VC (who normally did later stage deals) wrote my ex student a check for a seed round.

Life couldn’t be better.

I followed Bob progress in bits and pieces from updates from the CIO, the VC and his emails and blogs. He seemed to be on the fast track to startup success. But pretty soon a few worrying warning signs appeared.

The first thing that I noticed was that Bob couldn’t seem to find a co-founder. I wasn’t close enough to know if he wasn’t really looking for one, but given the early success he was having, it seemed a bit odd. But the next thing really got me concerned. Bob started hiring second rate developers. At best they were B- players.

Stall
A month went by, and the product stopped getting better. The U/I still sucked, and new features had stopped appearing. The next month, the same thing. I got a call from my CIO friend asking, “what was going on?” He said, “It was a great prototype, we would have loved to deploy it company-wide, and I hate to let it go, but it looks like Bob company just lost interest in developing it. I’m going to dump it and look for a substitute.” So I called Bob and suggested we grab a coffee.

I asked him how things were going and got the update on how the earlyvangelists were using the product. As I had heard, they were ecstatic. But Bob said he was worried he hadn’t found the right customer segment yet. “I’m not sure I can get all of these guys to pay me big bucks,” he said. “That’s why I stopped coding, and I’m spending all my time out in the field still talking to more customers.” “What does your VC’s say you ought to be doing?” I asked.  “Oh, he hasn’t had much time for me, his firm almost never does seed deals. It turns out I was an exception.”  Oh, oh.

The conversation was starting to make the hair on the back of my neck stand up. Bob had gotten to a place most founders never do – his product was a “gotta have it for people with big budgets.” He should have been back rapidly coding, iterating and finding out what feature set would get him to paying customers.

Instead he had produced barely 3 weeks of progress in the last 5 months. His prototype was rapidly wearing out its welcome.

A Lack of Nerve
When I pressed Bob on this he admitted, “No I guess my engineers aren’t very good. But I hired guys who were cheap because I wasn’t sure if my hypotheses were right. Didn’t you tell us to test our hypotheses first?” Now it was my time to be surprised. “Bob, you’ve validated your hypotheses better than any startup I’ve ever seen. You found that out in the first month. You got customers begging you to finish the product so they could buy it. You should have been hiring world-class talent and building something these CIO’s will pay for. It’s not too late. It’s time to grab them by the throat and go for it.”

I wasn’t ready for the answer, “Steve, I’ve been reading all about premature scaling and making sure everything is right before I go for it. I want to be sure I get all of this right. I’m afraid I’ll run out of money.”

I thought I’d make one more run at it. “Bob,” I said, “few entrepreneurs get the first time response you have from an early product. At your rate you’re going to burn through your cash trying to get it perfect. It’s a startup. You’ll never have perfect information. You’re sitting on a gold mine. Grab the opportunity!”

I got a blank stare.

We made some more small talk and shook hands as he left.

Bob was in the wrong business, not the wrong market. He wanted certainty, comfort and security.

I stared at my coffee for a long time.

Carpe Diem – make your lives extraordinary.

Lessons Learned

  • Yes, premature scaling is a cause of startup death
  • Yes, you need to get out of the building and test your hypotheses
  • But, when an opportunity smacks you in the head for gosh sake grab it with both hands and don’t let go
  • If you can’t, get out of the startup game

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The Pay-It-Forward Culture

Foreign visitors to Silicon Valley continually mention how willing we are to help, network and connect strangers.  We take it so for granted we never even to bother to talk about it.  It’s the “Pay-It-Forward” culture.

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We’re all in this together – The Chips are Down
in 1962 Walker’s Wagon Wheel Bar/Restaurant in Mountain View became the lunch hangout for employees at Fairchild Semiconductor.

When the first spinouts began to leave Fairchild, they discovered that fabricating semiconductors reliably was a black art. At times you’d have the recipe and turn out chips, and the next week something would go wrong, and your fab couldn’t make anything that would work. Engineers in the very small world of silicon and semiconductors would meet at the Wagon Wheel and swap technical problems and solutions with co-workers and competitors.

We’re all in this together – A Computer in every Home
In 1975 a local set of hobbyists with the then crazy idea of a computer in every home formed the Homebrew Computer Club and met in Menlo Park at the Peninsula School then later at the Stanford AI Lab. The goal of the club was: “Give to help others.” Each meeting would begin with people sharing information, getting advice and discussing the latest innovation (one of which was the first computer from Apple.) The club became the center of the emerging personal computer industry.

We’re all in this together – Helping Our Own
Until the 1980’s Chinese and Indian engineers ran into a glass ceiling in large technology companies held back by the belief that “they make great engineers but can’t be the CEO.”  Looking for a chance to run their own show, many of them left and founded startups. They also set up ethnic-centric networks like TIE (The Indus Entrepreneur) and the Chinese Software Professionals Association where they shared information about how the valley worked as well as job and investment opportunities. Over the next two decades, other groups — Russian, Israeli, etc. — followed with their own networks. (Anna Lee Saxenian has written extensively about this.)

We’re all in this together – Mentoring The Next Generation
While the idea of groups (chips, computers, ethnics) helping each other grew, something else happened. The first generation of executives who grew up getting help from others began to offer their advice to younger entrepreneurs. These experienced valley CEOs would take time out of their hectic schedule to have coffee or dinner with young entrepreneurs and asking for nothing in return.

They were the beginning of the Pay-It-Forward culture, the unspoken Valley culture that believes “I was helped when I started out and now it’s my turn to help others.”

By the early 1970’s, even the CEOs of the largest valley companies would take phone calls and meetings with interesting and passionate entrepreneurs. In 1967, when he was 12 years old Steve Jobs called up Bill Hewlett the co-founder of HP.

In 1975, when Jobs was a young unknown, wannabe entrepreneur called the Founder/CEO of Intel, Bob Noyce and asked for advice. Noyce liked the kid, and for the next few years, Noyce met with him and coached him as he founded his first company and went through the highs and lows of a startup that caught fire.

Steve Jobs and Robert Noyce

Bob Noyce took me under his wing, I was young, in my twenties. He was in his early fifties. He tried to give me the lay of the land, give me a perspective that I could only partially understand,” Jobs said, “You can’t really understand what is going on now unless you understand what came before.”

What Are You Waiting For?
Last week in Helsinki Finland at a dinner with a roomful of large company CEO’s, one of them asked, ”What can we do to help build an ecosystem that will foster entrepreneurship?” My guess is they were expecting me talk about investing in startups or corporate partnerships. Instead, I told the Noyce/Jobs story and noted that, as a group, they had a body of knowledge that entrepreneurs and business angels would pay anything to learn. The best investment they could make to help a startup culture in Finland would be to share what they know with the next generation. Even more, this culture could be created by a handful of CEO’s and board members who led by example. I suggested they ought to be the ones to do it.

We’ll see if they do.

——

Over the last half a century in Silicon Valley, the short life cycle of startups reinforced the idea that – the long term relationships that lasted was with a network of people – much larger than those in your current company. Today, in spite of the fact that the valley is crawling with IP lawyers, the tradition of helping and sharing continues. The restaurants and locations may have changed, moving from Rickey’s Garden Cafe, Chez Yvonne, Lion and Compass and Hsi-Nan to Bucks, Coupa Café and Café Borrone, but the notion of competitors getting together and helping each other and experienced business execs offering contacts and advice has continued for the last 50 years.

It’s the “Pay-It-Forward” culture.

Lessons Learned

  • Entrepreneurs in successful clusters build support networks outside of existing companies
  • These networks can be around any area of interest (technology, ethnic groups, etc.)
  • These were mutually beneficial –  you learned and contributed to help others
  • Over time experienced executives “pay-back” the help they got by mentoring others
  • The Pay-It-Forward culture makes the ecosystem smarter

Listen to the post here: Download the Podcast here

Hiring – Easy as Pie

Over the last few weeks I’ve gotten involved in hiring for two startups, a public agency and a non profit.  Part of each conversation was getting asked to help them put together a “job spec.”

I had them leave with a pie chart.

——–

There must be something in the air. In the last week I had four separate groups through the ranch all wanting to talk either about hiring a senior exec or a senior exec looking for a new job. Having sat through these job discussions as an entrepreneur, board member, and now an interested observer, here’s what I concluded:

  1. Decide whether you’re hiring someone to help search for the business model or to help execute a business model you’ve already found (same is true is you’re looking for a job – are you going to be searching or executing?) Are you looking for a visionary or an operating executive?
  2. The job spec’s for the same title differ wildly depending on whether the job requires search versus execution skills. Founders search, operating executives execute.

If you’re hiring an operating executive (CEO, VP, Executive Director, etc.)

  • Don’t start with the candidate (board member x has a great VP of sales he knows, founder y wants this CEO he met at a conference, etc.)
  • Don’t even start with the job spec

Since I’ve always been a visual guy, job specs with their long lists of job requirements always left me cold. My eyes would glaze over at these recruiter/board wish lists. I wished there was a way to see them at a glance. (Just to be clear this isn’t the entire hiring process, just a way to visually begin the discussion.) So here’s my suggestion: Start with a Pie Chart.

  1. Draw a pie chart.
  2. List all the job specs as slices
  3. Adjust the width of the pie segments by importance. (Extra credit if you get the current CEO or internal candidate to help you write/draw the slices and weight their importance. Everyone involved in the hire gets to have an opinion on the slices and weights, but the person/group making the hiring decision gets to decide which ones to include.)
  4. Now that you have this spec, evaluate each candidate by showing his/her competence in each slice by length
  5. Compare candidates
  6. Easy as pie!

Lessons Learned

  • Are you hiring for search or execution skills?
  • Show the job requirements visually as a pie chart
  • Prioritize each requirement by the width of the pie
  • Show your assessment of each candidate’s competencies by the length of the slices
  • Now with the data in front of you, the conversation about hiring can start

Listen to the post here: Download the Podcast here

On Vacation

Exploring Spain.  Back soon.

 

The Internet Might Kill Us All

My friend Ben Horowitz and I debated the tech bubble in The Economist. An abridged version of this post was the “closing” statement to Ben’s rebuttal comments. Part 1 is here and Part 2 here.  The full version is below.

—————————————————
It’s been fun debating the question, “Are we in a tech bubble?” with my colleague Ben Horowitz. Ben and his partner Marc Andreessen (the founder of Netscape and author of the first commercial web browser on the Internet) are the definition of Smart Money. Their firm, Andreessen/Horowtiz, has been prescient enough to invest in social networks, consumer and mobile applications and the cloud long before others. They understood the ubiquity, pervasiveness and ultimate profitability of these startups and doubled-down on their investments.

My closing arguments are below. I’ve followed them with a few observations about the Internet that may help frame the scope of the debate.

Are we in the beginnings of a tech bubble – yes.
Prices for both private and public tech valuations exceed any rational valuation to their current worth. In 5 to 10 years most of them will be worth a fraction of their IPO price.  A few will be worth much, much more.

Is this tech bubble as broad as the 1995-2000 dot.com bubble – no.
While labeled the “dot.com” bubble, valuations went crazy across a wide range of technology sectors including telecommunications, enterprise software and biotech, not just the Internet.

Are tech bubbles necessarily bad – no.
A bubble is simply the redistribution of wealth from Marks to the Smart Money and Promoters. I hypothesize that unlike bubbles in other sectors  – tulips, Florida land prices, housing, financial – tech bubbles create lasting value. They finance companies that invest in new technologies, new ideas and new products. And it appears that at least in Silicon Valley, a larger percentage of money made in the last tech bubble is recirculated back into investments into the next generation of tech startups.

While most of the social networks, cloud computing, web and mobile app companies we see today will fail, a few will literally remake our lives.

Here are two views how.

The Internet May Liberate Us
In the last year, we’ve seen Social Networks enable new forms of peaceful revolution. To date, the results of Twitter and Facebook are more visible on the Arab Street than Wall Street.

One of the most effective weapons in the Cold War was the mimeograph machine and the VCR. The ability to copy and disseminate banned ideas undermined repressive regimes from Poland to Iran to the Soviet Union.

In the 21st century, authoritarian governments still fear their own people talking to each other and asking questions. When governments shut down Google, Twitter, Facebook, et al, they are building the 21st century equivalent of the Berlin Wall. They are admitting to the world that the forces of oppression can’t stand up to 140 characters of the truth.

When these governments build “homegrown” versions of these apps, the Orwellian prophecy of the Ministry of the Truth lives in each distorted or missing search result. Absent war, these regimes eventually collapse under their own weight. We can help accelerate their demise by building tools which allow people in these denied areas access to the truth.

Yet the same set of tools that will free hundreds of millions of people may end their lives in minutes.

The Internet May Kill Us
The next war will more than likely occur via the Internet. It may be over in minutes. We may be watching the first skirmishes.

In the 20th century, the economies of first-world countries became dependent on a reliable supply of food, water, electricity, transportation and telephone. Part of waging war was destroying that physical infrastructure. (The Combined Bomber Offensive of Germany and occupied Europe during WWII was designed to do just that.)

In the last few years, most first world countries have become dependent on the Internet as one of those critical parts of our infrastructure. We use the net in four different ways: 1) to control the physical infrastructure we built in the 20th century (food, water, electricity, transportation and communications); 2) as the network for our military interconnecting all our warfighting assets, from the mundane of logistics to command and control systems, weapons systems and targeting systems; 3) as commercial assets that exist or can operate only if the net exists including communication tools (email, Facebook, Twitter, etc.) and corporate infrastructure (Cloud storage and apps); 4) for our banking and financial systems.

Every day hackers demonstrate how weak the security of our corporate and government resources are. Stealing millions of credit cards occurs on a regular basis. Yet all of these are simply crimes not acts of war.

The ultimate in asymmetric warfare
In the 20th century, the United States was continually unprepared for an adversary using asymmetric warfare — the Japanese attack on Pearl Harbor, Soviet Anthrax warheads on their ICBMs during the cold war, Vietnam and guerilla warfare, and the 9/11 attacks.

While hacker attacks against banks and commercial institutions make good press, the most troubling portents of the next war were the Stuxnet attack on the Iranian centrifuge facilities, the compromise of the RSA security system and the penetration of American defense contractors. These weren’t Lulz or Anonymous hackers, these were attacks by government military projects with thousands of programmers coordinating their efforts. All had a single goal in mind: to prepare to use the internet to destroy a country without physically killing its people.

Our financial systems (banks, stock market, credit cards, mortgages, etc.) exist as bits.  Your net worth and mine exists because there are financial records that tell us how many “dollars” (or Euros, Yen, etc.) we own. We don’t physically have all that money. It’s simply the sum of the bits in a variety of institutions.

An attack on the United States could begin with the destruction of all those financial records. (A financial institution that can’t stop criminal hackers would have no chance against a military attack to destroy the customer data in their systems. Because security is expensive, hard, and at times not user friendly, the financial services companies have fought any attempt to mandate hardened systems.) Logic bombs planted on those systems will delete all the backups once they’re brought on-line. All of it gone.  Forever.

At the same time, all cloud-based assets, all companies applications and customer data will be attacked and deleted. All of it gone.  Forever.

Major power generating turbines will be attacked the same way Stuxnet worked– over and under-speeding the turbines and rapidly cycling the switching systems until they burn out.  A major portion of our electrical generation capacity will be off-line until replacements can be built. (They are currently built in China.)

Our transportation infrastructure– air traffic control systems, airline reservations, package delivery companies– will be hacked and our GPS infrastructure will be taken down (hacked, jammed or physically attacked.)

While some of our own military systems are hardened, attackers will shut down the soft parts of the military logistics and communications systems. Since our defense contractors have been the targets of some of the latest hacks, our newest weapons systems may not work, or worse if used, may have been reprogrammed to destroy our own assets.

An attacker may try to mask its identity by making the attack appear to come from a different source. With our nation in an unprecedented economic collapse, our ability to retaliate militarily against a nuclear-armed opponent claiming innocence and threatening a response while we face them with unreliable weapons systems could make for a bad day. Our attacker might even offer economic assistance as part of the surrender terms.

These scenarios make the question, “Are we in a tech bubble?” seem a bit ironic.

It Doesn’t Have to Happen
During the Cold War the United States and the Soviet Union faced off with an arsenal of strategic and tactical nuclear weapons large enough to directly kill hundreds of millions of people and plunge the planet in a “Nuclear Winter,” which could have killed billions more. But we didn’t do it. Instead, today the McDonalds in plazas labeled “Revolutionary Square” has been the victory parade for democracy and capitalism.

It may be that we will survive the threat of a Net War like we did the Cold War and that the Internet turns out to be the birth of a new spring for us all.
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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 upThe 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.

Listen to the speech here: Download the Podcast here

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

Listen to the post here: Download the Podcast here

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.


Listen to the post here: Download the Podcast here

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

Listen to this post here: Download the Podcast here

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.
  • 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.

Listen to the post here: Download the Podcast here

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

Listen to this post here: Download the Podcast here

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 servicethat 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.

Update: after three decades I finally got to give Michael a memorial even he would have thought was fitting and proper. I established the Michael Krzys Public Interest Fellowship at the University of Michigan Law School. Details here

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