Working Hard is not the same as working smart

Measuring how hard your team is working by counting the number of hours they work or what time they get in and leave is how amateurs run companies. The number of hours worked is not the same as how effective they (and you) are.time clock


I had been invited by Rahul, one of my students from long ago, to stop in and see how his startup was doing.  Actually startup would be a misnomer as Rahul had built a great company, now over $50M in annual revenue with hundreds of employees.

We were scheduled for dinner, but Rahul invited me over in the afternoon to sit in on a few of his staff meetings, get some product demos, admire the furniture and the café, and get a feel of the company.

Before we left for dinner I asked about the company culture and the transition from a startup to a company. We talked about how he was on-boarding new employees, managing scale by writing operations manuals for each job function, and publishing company and department mission and intent (he said he got the idea from reading my blog posts on mission and the one on innovation culture). It was all impressive – until we got on the subject of how hard his employees worked. His response reminded me what an idiot I had been for most of my career – “Our team knows this isn’t a 9-5 company. We stay as long as it takes to get the job done.” I looked a bit dumbfounded, which I think he took for impressed, because he continued, “most days when I leave at 7 pm my employees are still hard at work. They stay all hours of the night and we often have staff meetings on Saturdays.”

I cringed. Not because he was dumb but because for most of my career I was equally clueless about what was really happening. I had required the same pointless effort from my teams.

Our dinner was scheduled for 7:15 around the corner so we headed out at 7, announcing to his staff he was off to dinner. As soon as we got outside his building and into the full parking lot I asked Rahul if he could call the restaurant and tell them we were going to be late. I said, “Let’s just wait across the street from your company’s parking lot and watch the front door. I want to show you something I painfully learned way too late in my career.” He knew me well enough to patiently stand there.  At 7:05, nothing happened. “What am I supposed to be seeing?” he asked. “Just wait,” I replied, hoping I was right. At 7:10 still no movement at the front door. By now he was getting annoyed, and just as he was about to say, “let’s go to dinner” the front door of the company opened – and a first trickle of employees left. I asked, “Are these your VPs and senior managers?” He nodded looking surprised and kept watching.  Then after another 10-minute pause, a stream of employees poured out of the building like ants emptying the nest. Rahul’s jaw dropped and then tightened. Within a half-hour the parking lot was empty.

There wasn’t much conversation as we walked to dinner. After a few drinks he asked, “What the heck just happened?”

21st-Century Work Measured by 20th-Century Custom and Cultural Norms
In the 20th century we measured work done by the number of hours each employee logged. On an assembly line each employee was doing the same thing, so productivity simply equaled hours worked. Employees proved they were at work by using time cards to measure attendance. (Even today the U.S. government still measures its most creative people with a time-management system in 15-minute increments.)

Even as white collar (non-hourly) jobs proliferated, men (and the majority of workforce management was men) equated hours with output. This was perpetuated by managers and CEOs who had no other norms and never considered that managing this way was actually less effective than the alternatives.

I pointed out to Rahul that what he was watching was that his entire company had bought into the “culture of working late” – but not because they had work to do, or it was making them more competitive or generating more revenue, but because the CEO said it was what mattered. Every evening the VPs were waiting for the CEO to leave, and then when the VPs left everyone else would go home. Long hours don’t necessarily mean success. There are times when all-nighters are necessary (early days of a startup, on a project deadline) but good management is knowing when it is needed and when it is just theater.

Rahul’s response was one I expected, “This is what we did in investment banking at my first job in my 20s. And my boss rewarded me for my “hard work.” Sleeping at my desk was something to be proud of.”

I completely understood; I learned the same thing from my boss.

Productivity
The rest of the dinner conversation revolved around, if not hours worked what should he be measuring, when is it appropriate to ask people to work late, burnout, and the true measures of productivity.

Lessons Learned

  • Define the output you want for the company getting input from each department/division
    • Use Mission and Intent to create those definitions and the appropriate metrics for measuring them
    • Publish and communicate widely
    • Provide immediate feedback for course correction
  • Define the output you want for each department
    • Define mission and intent for the department
    • Create the appropriate metrics for each employee to match mission
    • Measure and document output at appropriate intervals (daily, weekly, monthly, etc.)
    • Publish and communicate widely
    • Provide immediate feedback for course correction
  • Ensure that the system does not create unintended consequences

Clusters, Class, Culture and Unfair Advantages

Talent Is Universal; Opportunity Is Not.” –Nicholas Kristof

I just finished reading J.D. Vance’s excellent book Hillbilly Elegy, and had that funny feeling when you find the story arc of someone else’s life eerily paralleling yours.hillbilly elegy

Vance’s book and the story of my own life suggest that there is an archetypal journey (a pattern of human nature) that describes the flight from a dysfunctional family and the escape from the constraints of cluster, class and culture.

Here’s how my story unfolded.


Limited Horizons
I grew up in New York in a single-parent household that teetered on the bottom end of lower middle-class in what today we’d call “working class.”

In my neighborhood, successful entrepreneurship meant small businesses entrepreneurs. Before my parents divorced they had owned a small grocery store. One neighbor owned the corner drug store, and another had a furniture store, though most of our neighbors were simply employees with 9-5 jobs in retail and construction. No one I knew had a white-collar job let alone were executives. (Eating out meant a slice of pizza or as a treat, a deli. I wouldn’t eat in a real restaurant until I went to college. I would then discover that this thing called “salad” was ordered before the main course.)

No one I knew had ever started a company (other than a small business). None of the relatives of my parents’ generation had gone to college. The highest aspirations immigrant parents had for their children in my social class were: doctor, lawyer or an accountant – and to drive a Cadillac and live in a house in the suburbs.

Graduating high school our collective aspirations weren’t much higher. Our overworked guidance counselors were adept at slotting most kids on the bottom of the deck into potential blue-collar jobs. In my graduating class of 1,000 students, the “smart kids” wanted to be teachers. A few even aspired to be writers, poets or scientists. The guidance counselors steered them into good state schools.

I was pretty much on my own in high school, which was a huge improvement over the previous 5 years. (Having interludes of normalcy by visiting my aunt’s house a few miles away was one of my havens of sanity and stability. Watching her family having dinner together or listening to them describe their weekend outings or vacations, I remember thinking how weird their family was. It would take me a long time to realize that this is what normal families do together.) My mother was rarely home and never asked about or looked at my homework. I signed (forged) all my report cards. My final grades in my senior year classes were four “mercy” 65’s (the minimum passing grade) and one 98. Most of my classmates who opted for college went to the local colleges or New York State University schools. (The Vietnam War was raging, but going to college gave you a draft deferment.)

Interestingly, none of us believed our possibilities were limited, yet in hindsight our first barrier was that knowledge was local – constrained by our culture and cluster. (Forty years later when the Internet has made knowledge global, we’ve run into the second barrier – just knowing about things is not the great equalizer we expected. We’ve rediscovered that career choices are referential and experiential. Just because you read about it does not mean you know how to apply it to your own life. We still tend to gravitate to careers we’re exposed to in local clusters, and bound by our class and culture.)

In short, even though it was 15 miles into midtown Manhattan, our horizons were limited, and mine, perhaps even more limited. (I would visit my first museum in Manhattan only years later when I returned to New York with my girlfriend showing me around as a tourist.)

The notion of having an idea and building a company was unimaginable. We weren’t dumber than the kids who eventually would populate Silicon Valley, but our career trajectories had been flattened by the limited knowledge and expectations of our cluster, class and culture.

(A cluster is a concentration of interconnected businesses in a specific field in one city or region. Silicon Valley is an innovation cluster that makes hardware, software, biotech and semiconductors. Detroit is an automotive cluster, Hollywood an entertainment cluster, New York City for media and financial services, etc. Class is short for “social class” and refers to wealth, but also to education and social status. Culture is the shared beliefs of others around you. Culture has a strong correlation with class but also is influenced by ethnicity, religion, region, etc.)

Fly Away
Unlike my peers with stable families who stayed in New York, my untenable home life provided the escape velocity for me to leave New York. I wanted to get as far away from it as I could. However, filling out a college application was a mystery to me — What were the right colleges to apply to and how should I answer the questions on the application?  Somehow I figured out how to apply to school in Michigan. (Pre-infinite information on the Internet about colleges, I picked Michigan because I saw them play football on TV, but I ended up applying to the wrong school in Michigan – my first time around I ended up in Michigan State not the University of Michigan. Lucky for me as I never would have been accepted. After the Air Force I found the right Michigan.)

But once I made it to college I was lost. I had none of the discipline, study skills and preparation I needed. After one semester, I dropped out when my girlfriend said, “Some of us actually want to be here and are working hard to learn something,” and I realized she was right. I had no idea why I was in school. Some small voice in the back of my head said that to survive I needed some sort of structure in my life, and had to learn some marketable skills.

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. A technician took me under his wing and gave me my first tutorial on electronics, radar and navigation. I was hooked. 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.

While college had been someone else’s dream, learning electronics became mine.

So I enlisted in the Air Force during the Vietnam War to learn how to repair electronics. I didn’t tell my family I had enlisted (I told them I was going camping) figuring that if I couldn’t make it through basic training, no one would know. (It turns out my unconscious search for a stable, structured environment is a common theme among many military recruits.)

After nine months in 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.”f-105g wild weasel

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

For four years I worked within a “cluster” of like-minded individuals (the Air Force) who shared the same mission. More importantly, as an electronics technician, I was now hanging out with a crowd of pretty smart guys (the military was then all guys) repairing complex electronics and microwave systems. basic training
We tutored each other, read books together, went on adventures together and learned together. And while most of us came from totally different backgrounds (I never knew you put salt of watermelon, that Spam was food or muffuletta was a sandwich), as far as the military was concerned, we were all the same “class” – enlisted men – denoted by the rank on our sleeves. And what I didn’t realize at the time is that I was being mentored some of the senior enlisted guys a decade or two older than me. I’m not sure it was a conscious effort on their part, (I know it wasn’t on mine) but what people don’t realize is that mentorship is a two-way street. 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. This pattern of mentorship would continue and profoundly impact my career in Silicon Valley.f-105g wild weasel

So here I was 19, my first days of adulthood, in the middle of a confusing and unpredictable war zone learning how to repair electronics as fast as I could. It was everything life could throw at you at one time with minimum direction and almost no rules. (Service in the military is a life and death lottery. While we were living the good life in Thailand, the Army and Marines were pounding the jungle every day in Vietnam. Some of them saw death up close. 58,000 didn’t come back – their average age was 22.)steve in Thailand 2 ARL-46

A few years of this sifted and sorted us in a way that foreshadowed our future career paths. It turned out that the skills I had learned growing up in order to survive in constant disorder turned out to be what I needed to excel in this environment: comfort in working in chaos and uncertainty (heck, that was how I woke up every day), pattern recognition (if you couldn’t see it coming before others, you were screwed) and the ability to shut down external distractions and relentlessly focus on a single problem (staying sane in my home life.)  While I might have refined these skills in a different environment, the sink-or-swim daily exigencies of the Vietnam War honed them to a fine point.

These would be the identical skills I would need to succeed in Silicon Valley. Though I would pay the cost of having learned them for the rest of my life.

While the paths of our lives would radically diverge, for the first time I had a sense of a cluster, class and culture where it felt like I belonged. The Air Force turned out to be the first melting pot I would encounter (Silicon Valley the next) where individuals from different classes and culture had the opportunity to share a common goal and move beyond the environment they grew up in (foreshadowing Silicon Valley startup culture.)

When I came back from Southeast Asia, I was assigned to a Strategic Air Command base with nuclear armed B-52s in Michigan where the Calvin Ball rules of a war zone — “do what you need to do to get the job done” — no longer applied. It was now, “follow the rules exactly” – not something I was really good at. Realizing that this wasn’t the long-term profession for me, I left after my four years were up, having learned electronics and gained awareness of a larger world and career paths.

Silicon Valley
I now found myself back in school in Michigan, and my girlfriend who first told me to leave as an undergraduate was now my wife working on her Ph.D. Within a year I would drop out again (a divorce, and an extreme lack of interest in theory and more desire for practice – more payback for learning survival versus social skills). It would be the last time I would spend on a college campus as a student. It would take 25 years to return to a campus — this time teaching at Berkeley, Stanford, NYU and Columbia.

I found a job in Ann Arbor working as a field engineer. Decades later, I realized that the broadband network company where I worked, installing high-speed process control networks in automobile assembly plants and steel mills (before Ethernet existed), was one of the few pioneering startups in Ann Arbor. It would turn out to be the first of many bridges to somewhere else.

One day the company sent me and an engineer across the country, to a city none of us had ever heard of – San Jose, California – to install a process control system in a Ford Assembly plant. (We were so clueless about where San Jose was that at first the company admin got me tickets to San Jose Puerto Rico.)

Getting off the plane and into our rental car headed to our motel we tuned the radio to the local music station and a commercial came on blaring, “scientists, engineers, technicians, Intel is hiring…” We almost drove off the road. Did we just hear this right? Someone is advertising electronics jobs on the radio?  And then the music came back on like this was just another ad. WTF?

To put our reaction in context, in Ann Arbor there really wasn’t much of an electronics cluster (a few machine vision companies), so for amusement each week a few of us would scour the local newspaper for electronics job listings to see if other companies were paying any better than ours. It was a good week when we would find one or two listings.  What kind of place were we in that advertised for engineers on the radio?

After we checked into our motel, I bought the Sunday edition of the local newspaper – the San Jose Mercury News. I was a bit confused why this newspaper was thicker than the Sunday New York Times. In our room, as my roommate grabbed the shower first, I turned on the TV and started flipping through the paper. First section – normal news, second section – normal sports, third section – normal arts/entertainment, fourth section –  classified ads and more classified ads and more classified ads and more classified ads. In fact, there were 48 pages of classified ads (I counted them several times) and almost all of them were for scientists, engineers, technicians, and tech support – woah.

Just as I was trying to process what I was seeing in the newspaper, thinking this couldn’t be real, the TV program switched to an ad and snapped my head right out of the newspaper with an earsplitting – “Engineers, looking for a better job? Four-Phase Systems is hiring…”

I leapt off the bed, banged on the bathroom door, dragged my roommate out of the shower, and with a towel wrapped around him we both stared at the TV and caught the last few seconds of the TV commercial. There would be several more during our stay. We spent that evening reading every one of the 48 pages of job listings.

The next day, working at the Ford assembly plant, I kept wondering, “Where the hell was I?  How come none us had ever heard of this place?”  (The answer was that Silicon Valley at the time was primarily building military weapons systems, semiconductors and test equipment, all business-to-business sales with no products aimed at consumers.)

After our work in San Jose was done, the engineer who came out with me flew back home. (For decades I couldn’t understand why. All he said was, “My parents are in Michigan.”)  With nothing holding me to any place, I stayed, started interviewing and got my first job in the Valley.

My horizons of cluster, class and culture were about to expand once again. I felt like I was in on a secret no one else had yet understood. In phone calls to my friends back in Ann Arbor I tried to explain what was happening here, but to be fair even I didn’t understand we were standing at ground zero of inventing the future. Here was an environment where what you could accomplish meant more than who you knew. Technologists were running companies, as no serious MBAs would go near these places, and investors were company builders, teaching founders how to grow revenue and profit. While I would struggle for years accepting help from others (in my previous life it always came with strings) those who succeeded paid it forward by sharing what they had learned with new arrivals like me.

Endlessly curious, I drank from the firehose of opportunity that was the valley. I went from startups in military intelligence to microprocessors to supercomputers to video games to enterprise software. 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 an entrepreneur in my 20s and 30s, I was lucky to have four extraordinary mentors, each brilliant in his own field and each a decade or two older than me. For the next four decades I would work for them, be mentored by them, co-found companies with them and get funded by them.

In Silicon Valley in the 1970s, I had come pretty far from someone who had puzzled through how to fill out a college application. Though the imprints of how I grew up would always be with me, (many detrimental) through intuition, curiosity and luck, I had started to move beyond the cluster, class and culture of my youth.

——

In reading Hillbilly Elegy I realized that my story is not just my story, it’s a recurring archetypal journey about lucky individuals — those whose brain chemistry is wired for resilience and tenacity and who manage to flee from a dysfunctional family and escape from the constraints of cluster, class and culture. They come out of this with a compulsive, relentless and tenacious drive to succeed.  And they channel all this into whatever activity they can find outside of their home – sports, business, or …entrepreneurship.

Lessons Learned

  • Your local environment – cluster, class and culture – shape your initial trajectory
    • Some people who don’t have the advantages of  cluster, class and culture growing up will seek them out
  • It takes a lot of escape velocity to break out

I’m on the Air – On Sirius XM Channel 111

Starting this Monday, March 9th 4-6pm Pacific Time I’ll be on the radio hosting the Bay Area Ventures program on Sirius XM radio Channel 111 – the Wharton Business Radio Channel.Untitled

Over this program I’ll be talking to entrepreneurs, financial experts and academic leaders in the tech and biotech industries. And if the past is prologue I guarantee you that this will be radio worth listening to.

On our first show, Monday March 9th 4-6pm Pacific Time join me, as I chat with Alexander Osterwalder – inventor of the Business Model Canvas, and Oren Jacob, ex-CTO of Pixar and now CEO of ToyTalk on Sirius XM Radio Channel 111.

Oren Jacob - CEO ToyTalk

Oren Jacob – CEO ToyTalk

Alex Osterwalder - Business Models

Alex Osterwalder – Business Models

On Monday’s show we’ll be talking about a range of entrepreneurship topics: what’s a Business Model Canvas, how to build startups efficiently, the 9 deadly sins of a startup, the life of a startup CEO, how large companies can innovate at startup speeds. But it won’t just be us talking; we’ll be taking your questions live and on the air by phone, email or Twitter.

On April 27th, on my next program, my guest will be Eric Ries the author of the Lean Startup. Future guests include Marc Pincus, founder of Zynga, and other interesting founders and investors.

Is there anyone you’d like to hear on the air on future shows? Any specific topics you’d like discussed? Leave me a comment.

Mark your calendar for 4-6pm Pacific Time on Sirius XM Radio Channel 111:

  • March 9th
  • April 27th
  • May 11th
  • June 29th
  • July 13th
  • Aug 24th in NY

What Do I Do Now? The Startup Lifecycle

search build growLast week I got a call from Patrick an ex-student I hadn’t heard from for 8 years. He was now the CEO of a company and wanted to talk about what he admitted was a “first world” problem. Over breakfast he got me up to date on his life since school (two non-CEO roles in startups,) but he wanted to talk about his third startup – the one he and two co-founders had started.

“We’re at 70 people, and we’ll do $40 million in revenue this year and should get to cash flow breakeven this quarter. ” It sounded like he was living the dream. I was trying to figure out why we were meeting. But then he told me all about the tough decisions, pivots and firing his best friend he had to do to get to where he was. He had been through heck and back.

“I made it this far,” he said, ”and my board agreed they’d bet on me to take it to scale. I’m going to double my headcount in the next 3 quarters. The problem is where’s the playbook? There were plenty of books for what to do as a startup, and lots of advice of what to do if I was running a large public company, but there’s nothing that describes how to deal with the issues of growing a company. I feel like I’ve just driving without a roadmap. What should I be reading/doing?”

I explained to Patrick that startups go through a series of steps before they become a large company.

Search
In this first step, the goal of a startup is to search for a repeatable and scalable business model. It typically takes multiple iterations and pivots to find product/market fit – the match between what you’re building and who will buy it.

searchYou’ll realize you’re ready to exit the Search step when you have customer validation:

  • You’ve found a sales channel that matches how the customer wants to buy and the costs of using that channel are understood
  • Sales (and/or customer acquisition in a multi-sided market) becomes achievable by a sales force (or network effect or virality) without heroic efforts from the founders
  • Customer acquisition and activation are understood and Customer Acquisition Cost (CAC) and Life Time Value (LTV) can be estimated for the next 18 months

Startups in Search mode have little process and lots of “do what it takes.” Company size is typically less than 40 people and may have been funded with a seed round and/or Series A.

Most startups die here.

Build
At about north of 40 people a company needs to change into one that can scale by growing customers/users/payers at a rate that allows the company to:

  • achieve positive cash flow (make more money than it spends) and/or
  • generate users at a rate that can be monetized…

buildUnfortunately as you hire more people, the casual, informal “do what it takes” culture, which worked so well at less than 40 people, becomes chaotic and less effective. Now the organization needs to put in place culture, training, product management, processes and procedures, (i.e. writing the HR manual, sales comp plan, expense reports, branding guidelines, etc.)

This Build phase typically begin with around 40 employees and will last to at least 175 and in some cases up to 700 employees. Venture-backed startups will often have a Series C or D or later rounds during this phase.

Grow
In the Grow phase the company has achieved liquidity (an IPO, or has been bought or merged into a larger company event) and is growing by repeatable processes. The full suite of Key Performance Indicators (KPI’s) processes and procedures are in place.

Lucky you’re not the ex-CEO
I pointed out to Patrick that he was in the middle of the transition from Search to Build. And I suggested that he was lucky to be encountering this problem as a 21st century startup rather than one a decade or two ago. In the past, when venture-funded startups told their investors they’d found a profitable business model, the first thing VC’s would do is to start looking for an “operating exec” – usually an MBA who would act as the designated “adult” and take over the transition from Search to Build. The belief then was that most founders couldn’t acquire the skills rapidly enough to steer the company through this phase. The good news is that VC firms are beginning to appreciate the value of keeping the founder in place.

I reminded Patrick that the reality is startups are inherently chaotic. As a founder he got the company to the Build phase because he was able to think creatively and independently since conditions on the ground changed so rapidly that the original well-thought-out business plan became irrelevant.

He managed chaos and uncertainty, and took action rather than waiting around for someone on his board to tell him what to do, and his decisions kept his company from dying.

Now Patrick would have to pivot himself and the company. In this Build phase he was going to have to focus on how to thoughtfully start instituting things he took for granted in the Search phase. He was going to have build into his organization training, hiring standards, sales processes and compensation programs, all the while engineering a culture that still emphasized the value of its people.

Patrick took a bunch of notes, and said, “You know when I figuring out how to search for a business model, I read the Startup Owners Manual and Business Model Generation, but where are the books for this phase? And come to think of it, in the Search phase, there are Incubators and Accelerators and even your Lean LaunchPad/I-Corps class, to give us practice. What resources are there for me to learn how to guide my company through the Build phase?”

Time to Make New Friends
I realized Patrick just hit the nail on the head. As chaotic as the Search phase was in a startup, you were never alone. There was tons of advice and resources. But in the past, the Build phase was treated like a smaller version of a large company. Operating execs hired by investors used the tools they learned in business school or larger corporations.

I suggested it was time for Patrick to consider four things:

  1. Read the sparse but available literature that did exist about this phase. For example, The Four Steps to Epiphany Chapter 6, Company Building, Ben Horowitz’s The Hard Thing About Hard Things (a series of essays) or Geoff Moore’s classic Crossing the Chasm
  2. If he already had an advisory board (formal and/or informal), add CEO’s who have been through this phase. If not, start one
  3. Get a one-one CEO coach or join a CEO peer group
  4. And potentially the most difficult, think about upgrading his board by transitioning out board members whose expertise was solely rooted in the Search

As we finished our coffees, Patrick said, “Thanks for the advice, though I wish someone had a methodology as simple as the Lean Startup for how to scale my company.”

Lessons Learned

  • Startups go from Search to Build to Scale
  • The Search to Build phase happens ~40 people
  • Very different management tools and techniques are needed to guide your company through this new phase
  • You need to reset your board and your peer advisers to people who know how to manage building a company versus starting one

The Best Job in Stamford Connecticut

K&S Ranch Publishing has an exciting opening for a Book Traffic Coordinator living near Stamford, Connecticut. We need someone who can help get our library of entrepreneurship books into the hands of the startup founders and students who rely on them.

The job involves figuring out where to best sell our books (The Startup Owner’s Manual, The Four Steps to the Epiphany, and Holding a Cat by the Tail), and the logistics of managing inventory, sales and shipments of them.

Maybe it’s a position for you or someone you know?

It’s a great opportunity for someone detailed-oriented, and interested in startups and entrepreneurship.

We want you if you are:

  • Interested in making the numbers go up and not just writing them down
  • Adept with Excel, QuickBooks and Word (finance, accounting and bookkeeping experience a plus)
    • And can suggest how to use that data to make a difference in our business
  • Professional and terrific on the phone with clients and vendors
  • Web savvy
  • Able to do your job without standing around waiting for direction
  • Independently able understand and solve problems

The  work environment is casual and fun, hours could be flexible, and you’ll earn your pay every day.

If this sounds like a job for you — or a friend or relative living in or near Stamford, Connecticut — send your resume to Terri S. Vanech at terri@kandsranch.com

It’s About Women Running Startups

Just before the holidays I had coffee with Anne, an ex MBA student running a fairly large product group at a search engine company, now out trying to raise money for her own startup. She had an interesting insight: existing content/media companies were having the same problem as hardware companies that rarely made the leap to new platforms. And she had a model for a new media company for mobile and wearables.women innovation I thought we were going to talk about her product progress, so I was a bit taken aback by her most pressing question, “Why is it so hard for a woman to still get taken seriously by a venture capitalist?”

I had lots of answers, but none of them good enough for either of us.

I had a better one when I came back from New York.

——
Entrepreneurship at Columbia
I was in New York last week teaching my annual 5-day version of the Lean LaunchPad class at the Columbia Business School. We had 130 students in 30 teams who got out of the classroom and did 2154 customer interviews in 5 days – a remarkable effort for 120 hours. Their amazing Lessons Learned presentations can be seen here.

In the last year entrepreneurship at Columbia has taken a pretty remarkable leap across the entire university. The Columbia Startup Lab is a visible symbol of how the university is making entrepreneurship an integral part of all colleges at the university.

New York Startups
The Columbia Startup Lab is in a building completely taken over by WeWork – a company that provides co-working spaces in 12 cities worldwide. I wandered through four full floors of SohoWest WeWork sticking my head into the random startups’ offices.

Looking at office after office of startups a few things stood out.

  • This was just one of the 14 WeWork co-working spaces in New York City— there are over 100 co-working spaces in New York
  • Michael Bloomberg has yet to get his due for engineering the New York entrepreneurial ecosystem
  • I was struck by something that had been slowly percolating through my head during my entire week – there are a higher percentage of women on the founding teams of New York City startups than in Silicon Valley

Women in New York Startups
This last point is definitely not a data-driven survey. However after spending a week teaching 130 entrepreneurship students, ~35% of them women, and then walking through ~100+ WeWork and TechSpace offices in New York, I get the impression that the number of women leading startups in New York is much higher than in the San Francisco Bay area.

When I mentioned this to my friends running the NYU and Columbia entrepreneurship programs, they looked at me like I just discovered that it gets dark at night. Their answer seemed to make sense: a higher percentage of startups in New York are focused on media, fashion, communications, real estate, financial tools – all the products of industries centered in NYC – and all are attempting to disrupt them with products that run on and are delivered by 21st century platforms. (Think of what Refinery29 is doing to Conde Nast.)

These are industries where women have had a history of leadership positions and more importantly, where young women entrepreneurs can find role models and mentors as their male counterparts do in Silicon Valley’s tech-centered, pay-it-forward culture.

This raises an interesting question: is the credibility of female entrepreneurs in the eyes of New York VC’s something about the venture firms, or is it about the industries they are funding?

One can make the case that New York venture capital industry is rooted in the 21st century not the 20th. While some venture firms have been around for awhile, perhaps the newer partners have a different model of what a successful founder looks like than their west coast peers.

Or perhaps it’s as simple as New York VC’s are funding startups that play on the disruption of New York’s key strengths in Media, Fashion, Finance and Real Estate, and the women founding New York startups have an existing track record in those industries, and pass a gender neutral “VC credibility” bar.

Correlation does not imply causation
Those bemoaning the dearth of women founders in Silicon Valley might want to see if there is a real disparity between the coasts or if it is just my selection bias?

If it’s real why?

  • Women founders already had leadership roles in the industries they’re about to disrupt?
  • Women can find existing role models?
  • Women have built a network of women mentors?

What role does the type of startup play?

  • Companies that get started and built in New York City tend to be applied technology
  • Companies that get started and built in Silicon Valley have historically focused on core technology

What role does venture capital play?

  • Is there any difference in funding women for old-line firms versus 21st century firms?
  • What role does industry segment play? (i.e. lots more women founders in media companies than you find in enterprise software companies.)
  • On the West Coast the history of successful startups is technology first, and perhaps VC’s weigh that more in what they want to see in founders.
  • Is it as simple as having credibility in the industry you want to startup in?

—–

I sent Anne, my student, an email when I returned, “You may want to take a trip to NY and pitch some of their VCs.”

Lessons Learned

  • Lots of entrepreneurial activity in NY
  • Different industry focus than in Silicon Valley – more media, finance, real estate
  • Women seem to be more represented as founders
  • If a NY bias toward women as founders is true, why? And what are the lessons for Silicon Valley?

K&S Ranch

In 1976 Saul Steinberg created the March 29th cover of the New Yorker and created a visual meme of a city who was completely self-absorbed.

Kirby Scudder, a neighbor on the California coast just did a poster of the view of Palo Alto as the center of universe.

Palo Alto poster Kirby has done several of these city posters here.  I thought it was a fun poster given its unique vantage point from the Pacific Ocean looking towards San Francisco Bay.

I was wondering where our ranch would be on the map until I looked closer.

K&S Ranch has been memorialized on the poster!

 

kands

 

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