daily articles for founders

Here are 10 quality posts from the Founder's Library:

Cyclical tools  

Excellent essay by Sep Kamvar, via Fred Wilson. Highly relevant to startups that want to change the world:

But if I were to suggest one mission for all tools, it might be this:

Every tool should nourish the things upon which it depends.

We see this principle at varying levels in some of our tools today. I call them cyclical tools. The iPhone empowers the developer ecosystem that helps drive its adoption. A bike strengthens the person who pedals it. Open-source software educates its potential contributors. A hallmark of cyclical tools is that they create open loops: the bike strengthens its rider to do things other than just pedal the bike.


But you can’t measure the impact of tools on their own. You must measure them by the ecosystems that they co-create.

An interesting viewpoint to analyse how worthwhile a product is in the long term. Does it create a positive feedback cycle with open loops?

Interestingly, Sep dismisses the car as not cyclical:

It’s difficult to build cyclical tools because the alternative is so tempting. Cars are faster than bikes. FishVille reaches more people than Moby Dick. At first, cyclical tools appear to be lower-power, slower-growth, and more expensive than extractive tools.

I think that's an easy stance to take but not very defensible. Cars certainly do empower their users and create many open loops, just not in the context of personal health (unless you happen to drive to places where you then do sports like mountain climbing).

Perhaps a slightly more gradated classification is needed. The world is never black and white. Some products (like most computer games) are very close to one end of the scale, while others (like the iPhone) are very close to the other.

In any case, this, and other essays by Sep, are very much worth reading.

Building a strong company trunk  

Here's an excellent article by Spencer Fry of of Carbonmade, about the importance of building out a very strong core capability before branching out into other domains.

Think Apple and Facebook — both launched with a single stripped down product — Apple's operating system (their hardware was just a delivery system) and Facebook's simple social networking: messaging and, more importantly, photo sharing. Both focused all their attention on building their trunk and then leveraged their core product to branch out.

Spencer also has some good advice for how to go about building this strong trunk: be patient, persistent, and focused.

Too many entrepreneurs think that they need to rush to become overnight successes or they'll never get there. They think it's a sprint and not a marathon. Carbonmade has been around for five years as of December, 2010. It took us three years to be able to work on it full-time, and then another year and a half before we were able to hire our first two employees. Carbonmade is only at 1% of what it'll be in five years. Patience, my friends.

Other than having patience, you need to build a stripped down, functional product that is focused on a special type of user, but at the same time something that can still be used by a more general audience. That way you aren't discouraging anyone from using it.

What's your company's trunk?

The dark side of entrepreneurship  

This blog post and the accompanying replies make for depressing reading, but they hammer in one key point:

Please, take a minute to think about the people you love, and be certain you're giving them everything they deserve, that you're truly there for them.

If you ignore your personal life in your quest for startup success, you may find that one day, you turn around, and there is no personal life left.

Life is what happens while you're busy doing something else.

How to talk about the competition  

This article by Mark Suster gives us two methods to describe the competition to potential investors.

One involves a feature comparison with Harvey Balls, where it is important not to mark yourself as better than the competition in every category (or investors won't believe you). The other method suggested is to draw a consulting-style two-by-two matrix/graph, on which you chart your competitors to show how your company stands out.

Pitfalls to avoid include claiming that you have "no competition" (generally only novices say this), or claiming that the competition just sucks (if they've been in the market for half a decade longer than you, they're probably doing something right).

Random acts of violence

Point (tru.che / imakeshinythings):

I’m very disappointed in Urban Outfitters. I know they have stolen designs from plenty of other artists. I understand that they are a business, but it’s not cool to completely rip off an independent designer’s work.

Double-point (consumerist.com):

Something is rotten in Denmark, or rather, in the I Heart Destination jewelry line of baubles offered by Urban Outfitters. Turns out those $19 danglers in the shape of the various United States of America with a heart cut-out are exactly like necklaces crafted by an independent jewelry designer named Stevie.

Double-tweet point (myaimistrue.com):

Today has been a fun ride. Behold the power of social media muscle. (...) What I do have – and the reason that my call for a boycott on Urban Outfitters spread so fast and wide – is a tribe. A tight knit group of independent artists and crafters that follow me. My cause resounded with them. They spread it, and their friends spread it, and a few big influencers on Twitter spread it, and then it was gone.

Counter-point (regretsy.com):

Now, I’m not generally the voice of reason, so this is an uncomfortable position to take. But I’m just not sure I want to start a boycott over an idea that many people have had, some for years before Truche even opened her Etsy store.

I’m not saying that Urban Outfitters doesn’t help themselves to the designs of others. They certainly have a record of pilfering designs, and they may very well have stolen this one. The question, for me at least, is who did they steal it from? And if we don’t know that much, how do we know it’s really been stolen at all?

Double counter-point (consumerist.com's ^H division):

While this particular seller may have thought up the idea all on her own, different versions of the necklace predate her shop, dating back to as early as 2008.

Maybe there really are no new ideas out there.

"OMG WTF is wrong with you" point (Urban Outfitters):

In her recent blog post and on Twitter Koerner claims that Urban Outfitters stole her designs or was inspired in some way by the items in her Etsy shop for our I Heart Destination necklaces. In fact, a quick search on Etsy for ‘state necklace’ reveals several other sellers with similar products (as seen here on Regretsy) who offered their wares as much as a year earlier than Ms. Koerner.

We are not implying that Koerner stole her necklace idea from one of these other designers, we are simply stating the obvious—that the idea is not unique to Koerner and she can in no way claim to be its originator.

"Let's learn from this" point (UserVoice):

This week a blogger with a mere 1,000 followers on Twitter discovered (apparently just the latest in many) an Urban Outfitters product that was a rip-off of an independent artist. She blogged and tweeted about it. The result was that thousands of people retweeted it, she & Urban Outfitters became a trending topic, and American Apparel removed the product from their shelves.


Any customer can deliver a killing blow, and any customer can deliver a fame-creating endorsement. Feel free to focus on courting “big” bloggers and tweeters for press - but don’t risk treating any of your customers badly. You never know what might happen.

My conclusion:

The internet is a batshit crazy place. It has brought a scale of millions to the lynch mob mentality every little village has been capable of for millenia. Like in all of history, many (most?) lynch mobs are uninformed, or actively disinformed, or even deliberately manipulated, but if they're hauling you up a lamppost or lighting a fire under your feet, that's of little comfort.

Be aware of that, be ready for random acts of wanton violence from unexpected sources, watch out for the sudden flash lynch mobs appearing out of nowhere and baying for your blood, and when they do happen, be on the ball and active in managing the mob.

Otherwise, expect to get lynched from time to time.

Entrepreneurship is the safest career

Entrepreneurs are generally perceived as insane risk-takers. One common metaphor for creating a startup is jumping out of a plane (the safe, corporate or academic world) without a parachute, and building some kind of viable flying device on the way down. Entrepreneurs often use this vivid image, because, well, it sure sounds pretty cool and brave and all that. It paints entrepreneurs as an amazing-sounding combination of Jack Bauer, Chuck Norris and MacGyver, insanely resourceful, persevering, brave, and so on.

There are several big and damaging fallacies in this view, however.

First and foremost, is the idea that if you fail to build a working startup in time, you will die a horrible and violent death. That's obviously not the literal meaning of this metaphor, but the images we use to interpret the world around us certainly influence our thinking, and picturing entrepreneurship as a head-first dive towards a violent death is a powerful subconscious image.

Another misleading element is the implicit perception that you only have one shot at it, so you better make it. "Startups are sink or swim!" - if you don't stay afloat, you're dead.

A third fallacy is proposing that the outcome is binary. Either you build the plane, or you're dead.

A fourth fallacy is the idea that starting a business is an incredibly scary ride, reserved for insane thrill-seekers. If you're not a Jack Bauer type of character, perhaps entrepreneurship is not for you?

But perhaps the most important fallacy in this image is the clear message that entrepreneurship is very risky.

Let's deconstruct these a bit and put this image to rest (or fix it, at least).

1. A horrible and violent death

Is startup failure comparable to a horrible and violent death in any way?

If you quit your corporate job and try to build a startup, and it fails utterly, you may well have thrown your savings into it. That's unpleasant, but it's hardly a violent death. You may or may not find that your previous career will not welcome you back, so that may mean a career change. Whether it does or not, this is once again not a tragic ending, just a change of direction.

If you played your cards very unwisely, and maximised risk instead of minimising it, you could find yourself in a very difficult financial situation (e.g. perhaps you've arranged things so that not only is your startup broke, but you are personally bankrupt and lose your house), but that can only be blamed on yourself, not on the fact that you "did a startup". It's a relatively easy outcome to protect against if you realise that failure is a likely possibility along your path, and don't put all your eggs in the first basket that comes along.

In any case, unless you took unreasonable risks while pursuing your startup, dealing with its failure will be an unpleasant affair, but very far from an "end". It's more like a step along the journey.

2. You only have one shot at it

This leads us into the second point, the idea that you have just one shot at entrepreneurship.

As I've said before, Entrepreneurship is a career. Bravado images like the one we're dissecting, and the high-octane "build a billion dollar company in a couple of years" Silicon Valley culture try to paint it differently, but the reality is that most successful entrepreneurs are in it for the long run, and stay in this game for all or most of their life.

Obviously, if you've built Facebook, you may not feel like starting another startup again after that. But that's valid for just a handful of entrepreneurs in the world, and there are many counter)-examples, even some big ones with bigger-than-Facebook-scale-successes behind them. All of them started multiple businesses, some more successful than others. Entrepreneurship is addictive, and even having a multi-billion dollar success under your belt won't stop you from yearning to try to do it again.

Bill Gates probably won't start another business. Mark Zuckerberg may or may not (only the future can tell), but most likely would if he was somehow ejected out of Facebook.

Entrepreneurship is a career. So long as you don't hit yourself in the face with the bat, you can keep taking swing after swing after swing. Painting entrepreneurship as a one-shot thing only serves the agenda of those trying to discourage you from starting your own company and those who want you to risk everything for the sake of a single business.

3. The outcome is binary

Chances are, you will not build the next Facebook and become a billionaire. Chances are, you will not end up on the street begging for food. Even if we look at the financial dimension alone (and we shouldn't, as there are many other dimensions to the way people measure their success in life) , the bulk of outcomes will be distributed all over the interval between those two extremes. Maybe you'll come out of your startup with a bit less money or a bit more. Maybe you'll increase your level of wealth substantially, but not enough to "retire at 30" (who wants to do that anyway?), or maybe you will make "fuck you money". Maybe you'll build a business that can sustain an ok lifestyle for yourself but isn't up to your level of ambition.

Which outcome you get depends on many factors, but what should be pretty obvious is that it's never an all-or-nothing deal.

There's one commonly cited exception to this, which comes into play if you raise money from a VC. Those deals typically come with serious strings attached, making it difficult for you to exit the business or run it as a lifestyle business. This can turn what would otherwise be a solid $10m business (no small achievement!) into what looks like a near-$0 outcome for the founder. However, no one will force you to restrict your options by entering into such deals, and even in this worst-case outcome, the founder typically ends up, at the very least, no worse off than he or she started (better off, if you count the awesome experience of having run a startup as a plus). However, this does make the outcome seem more binary.

4. Starting a business is incredibly scary

Are you kidding me? Starting a new business is incredibly exciting!

Starting a business is hard, no doubt, and there are times when you feel like there's no way it can work, like it's all about to come crashing down, and so on. But there are also times when you feel on top of the world. Starting a startup can be pretty tough on your emotions at time, and emotionally unstable people should probably stay away, but we shouldn't ignore all the incredible benefits that come with it.

While creating a business you are:

  • learning extremely useful practical skills that will serve you throughout your career (in or out of entrepreneurship);
  • in charge of your lifestyle in a way that's completely impossible in a large corporation;
  • deciding things for yourself, able to structure things in the way that you think is best in terms of your own priorities;
  • free of corporate politics (well, until you are lucky enough to be in a position to create that headache for yourself by hiring lots of people);
  • doing a wide variety of things (if you don't enjoy that, you probably shouldn't be an entrepreneur);
  • doing something valuable to the world around you (if they're paying you for it, it's probably worth something to others!);
  • etc...

Yes, entrepreneurship is a bit scary. But it's hardly the thrill-seeking death-ride that the "jump out of a plane" image puts across.

5. Entrepreneurship is very risky

Finally, this is perhaps the most pernicious implication of the "plane" metaphor, one that sometimes makes me think that the image was concocted by people who did not want others to become entrepreneurs.

People often bandy about failure statistics for startups. Yes, a lot of companies fail (for a given definition of failure), but that doesn't say much about what happens to their founders. My first two companies failed. My third one is succeeding (if it hadn't, I'd be on my fourth, fifth, sixth, etc). Am I a successful entrepreneur? I think so, and yet statistics would say that, oh horror, 2/3 of my companies have failed. And that's not even counting the handful of startup-like projects that I did which never even got to the stage of being incorporated as companies.

Being a startup is risky, but nobody is a startup. As an entrepreneur, you create and run a startup. Your career consists of doing this, repeatedly, until you decide you want to do something else. This is much like any other career, and so let's compare it fairly. Rather than comparing "a startup" to "a job", let's compare the entrepreneurship career to the typical corporate career, in terms of both risk (downside) and potential reward (upside).

Job security

As an entrepreneur, the only person who can fire you is yourself. Moreover, you have all the information you need to see it coming for a long, long way, and you have the control you need to avoid it, if it is avoidable. Finally, your job security is largely linked to your own abilities. You can't be fired from your startup because some other company had a bad quarterly report (unless you actively made yourself dependent on that other company exclusively).

Working in the supposedly safe corporate environment, you can be fired at a moment's notice, based on wide-ranging decisions like "Let's fire 2000 people to make the profit look better next quarter", or based on the poor performance of another department in your company, or any other number of completely opaque events that you have no information about. Job security in the corporate environment is an illusion. It works most of the time, but it's fake.

Entrepreneurship: 1. Corporate life: 0.

Financial upside

As an entrepreneur, if you generate a million dollars of profit, the money is yours (well, minus taxes, but that's another matter). If you generate ten million dollars, it's once again yours to do with as you see fit. If you generate a billion dollars of profit, it's yours. The upside is always all yours. Even better! Once you're employing other people, their financial upside is also yours. If they close a million dollar deal for your company, the million dollars is yours. You may (and should, if you want them to do it again) choose to share that with them, but fundamentally it's yours, and you'll often get a big share of it.

There are corporate jobs that pay significant variable bonuses. Salespeople, in particular, and highly specialised financial services workers (e.g. traders), can earn mouth-watering bonuses based on their year-to-year performance. However, those are certainly the exception. In most jobs, your financial upside is severely capped - to zero. You might get a pay raise if you do very well. That's about it. Even most jobs with performance bonuses typically have a cap on them. Generate a million dollars of business for the big corporate bank you work for, and you might get a few tens of thousands of pounds of bonus, in the absolute best case scenario. Typical sales commission might be about 10%. But in most cases, it won't even be percentage based. Did you create a million dollars of value? Well done, you've earned your entire $10k bonus allocation for the year.

Entrepreneurship: 2. Corporate life: 0.

Career security

What happens if your entire skill set becomes obsolete?

In the corporate world, especially nowadays, this can easily happen. As automation and outsourcing extend their octopus-like tentacles everywhere, tens of millions of people will find that no one needs their skills anymore. The smart ones will have shifted into new career paths before that happens, but many will find themselves unemployed, and desperately trying to retrain into a new career, starting from zero again, and so on. It used to be that once you'd learnt a trade, you could apply it for the rest of your life. The modern corporate worker can expect to change careers at least two or three times in their life, if not more.

This could in theory happen to entrepreneurs too. However, because of the way entrepreneurship works, it won't. See, the main activity of entrepreneurs is to discover and exploit business opportunities. As long as there are business opportunities, the career path of the entrepreneur goes on.

There are some regimes where the enterprising spirit is discouraged or even illegal. There may come a time when money is irrelevant and business opportunities are an obsolete concept. However, in such a situation, pretty much all "career paths" are obsolete.

Entrepreneurship: 3. Corporate life: 0.

In short, the entrepreneur career path is considerably safer and has better upsides than most corporate career paths.

In conclusion

The image of the entrepreneur as an insane risk-taker who is willing to leap out of a plane and risk death or destruction to launch a business needs to be put to rest.

Instead, it should be replaced by the reality: (successful) entrepreneurs are sane, pragmatic, risk-averse and cautious. They plan ahead as much as possible, come up with ways to mitigate the worst risks and make contingencies for failure of their business ventures. They are level-headed, in it for the long term, enjoying the ride as well as the destination, and determined to keep trying different businesses until they succeed (and even after they succeed).

A much better analogue for the entrepreneur is the applied scientist trying to discover new physical principles through repeated, persistent, careful experimentation. It may not seem as sexy as jumping off a plane, but perhaps it's time to stop pretending that entrepreneurship is only for the insane. The world could use more successful entrepreneurs.

Judging people based on grammar  

This HBR article by Kyle Wiens, takes a hard line on people with poor grammar:

On the face of it, my zero tolerance approach to grammar errors might seem a little unfair. After all, grammar has nothing to do with job performance, or creativity, or intelligence, right?

Wrong. If it takes someone more than 20 years to notice how to properly use "it's," then that's not a learning curve I'm comfortable with. So, even in this hyper-competitive market, I will pass on a great programmer who cannot write.

I would agree. In fact, I used to agree with this view.

Unfortunately, I can't, because I've met some extremely intelligent people who consistently mis-spell things. For example, Bob Leung, my cofounder on Woobius, is one flagrant such case.

Before I worked with Bob, I too held the view that grammar and intelligence were generally correlated. But then Bob posed a bit of a quandary. Here was someone clearly very smart, extremely talented, extremely driven, with great attention to detail, and who is completely incapable of writing a single paragraph of text without at least one or two mistakes in it.

Since then, I've revised my judgement, and I would urge Kyle to revise his too. If you're hiring writers or programmers, then certainly, attention to written detail is paramount.

However, for many other functions, like sales and design, while attention to detail is important, it doesn't always manifest itself as good grammar.

So my advice is: do not judge people solely by their grammar - it is just one factor amongst many.

Internalising and externalising success and failure  

This interesting article about how important a culture of failure is to innovation led to a fantastic comment on Hacker News:

One thing I remember reading that really stuck with me - most people externalize failure and internalize success. Meaning, when things go wrong, they point to external factors. When things go right, they credit their own skill and ability.

The opposite way is to externalize success and internalize failure - that means claiming responsibility for it whenever you don't get desired results, but being very skeptical of your successes and looking for where external factors broke your way so you don't get too high on yourself.

Turns out, externalizing failure/internalizing success makes you much happier but much less able to produce results.

Whereas internalizing failure/externalizing success makes you much less happy but much more able to deliver results.

Both are worth reading, and match up with Eric Ries' if you can't fail, you can't learn, a quote which I'm finding more and more insightful every day.

Core peer groups  

This post by Brian Balfour appeared on Hacker News under the title "How I found a cofounder, built a prototype and raised $5M in less than 4 weeks", a title which sounds like it came straight out of Daniel B Markham's linkbait headline generator, but, surprisingly:

  1. it's got very little to do with raising money or building prototypes, and
  2. it's an excellent article about a general strategy for improving your odds of startup success.

The key point of the article is that a great way to boost your success is to surround yourself with a "close peer group" of people who are more or less at the same stage in life, with whom you can develop deep relationships, who will be brutally honest with each other, and who have reasonably complementary skill sets. The effect of that:

They help raise funding faster, find co-founders and early employees, and acquire your early customers. These are often considered the toughest items in starting a company.

The unanswered question is, how do you find such core peer groups to join? Is the answer something like TechHub (in London)?

More on thinking small  

Following on my earlier article about thinking big and small in the right context, I got into a small exchange on twitter with Joel Gascoigne, who had retweeted Gabriel Weinberg's article.

Joel pointed me to two blog posts on this topic which seem worth adding to the discussion: Steady yourself, those world-changing thoughts are not productive and Start something small.

Quoting a few passages from the first:

It may be healthy to be ambitious, but often these thoughts occupy more time than they should and stop us doing the real work we need to do to get anywhere near to those thoughts becoming reality.

It is easy to look at the success stories of the world and think they started at the top. Let’s try and question that and think how all successful ventures or entrepreneurs started with something small.

And the second:

What I’m starting to notice more and more, is that great things almost always start small. Most of us know that Branson started the Virgin brand with a student magazine, but Virgin is just one of many examples which shows that the reality is counterintuitive: actually, the best things we know and love started as tiny things.

I’ve found that if I look into my own life, I find similarly that some of the most important achievements I’ve made started as little projects. My startup Buffer itself is a great example: it started as a two page website and in addition the short blog post describing this process has now turned into a talk I’ve given more than 30 times.

This is more evidence that thinking small is an essential first step before you start thinking big, which opposes the usual Silicon Valley advice of thinking big and choosing ambitious startup ideas.

Why is this idea so prevalent if it leads to lesser chances of success? One theory would be that most of the "think big" advice comes from investors (directly, or indirectly via entrepreneurs they've funded). Typical investors definitely wants all their investments to think big - that's how they make their returns.

That doesn't mean it's good advice for you.

Instead: Think small, make it work, and then think big.

Google Analytics Alternative