Here are 10 quality posts from the Founder's Library:
Saturday, 10 March 2012
One interesting observation I've made over the last few years is about the myth of the overnight success. This is a persistent idea in the startup world (much like in any star-dominated field) - the idea that someone is unknown and unsuccessful for many years, and suddenly they shoot to fame through a combination of luck, timing, hard work, perseverance, and other assorted goodies.
The problem with this myth is that it's true, but it's also misleading. For most of my working life, I was under the spell of this "some day it will all change" myth. Having observed both myself and other successful people around me, I found that this is not true.
Rather than having a long history of self-sacrifice followed by a sudden rise to fame, successful people (even those that shoot to fame) seem to have a long history of building bigger successes on top of smaller successes. In other words, as the title puts it, successful people are successful - for a long time before you get to hear about them. Success seems to be a lifelong habit.
Does success provide compounding returns?
This is obvious if you only consider financial success. If you want to get wealthy, you have two approaches: count on a lottery ticket type of event (e.g. winning the lottery, or winning the startup lottery...), or set out building, growing and maintaining a base of wealth. Ignoring those who choose the first path (because they are clearly irrational), if you look at the behaviours of people who tend to go from little wealth to a lot more wealth, you can observe that they tend to make decisions that optimise how much money they make (this sounds obvious, but is actually quite an insight).
They'll work in jobs that pay more, or start businesses that make money. In my experience, those who have a fair bit of money are not profligate - they spend sensibly, agonise over larger expenses, are conscious of having to maintain and grow their savings, and so on. Whereas the average person will optimise for today's enjoyment (and that may well be the right choice for many), those who are money-minded tend to optimise for accumulating more money and spending less money. All these decisions add up over the decades, and they also compound over each other. When you have £100k in the bank, you can make wealth-preserving decisions (e.g. buying some Apple stock a few years ago!) that will provide a much larger return than what you could do when you have just £10k or even £0.
Because of all this, the difference between someone who consistently makes decisions that preserve and augment wealth, and those who don't, can easily get to be very large.
With non-financial success, this process is much harder to observe, but I think it's still a big factor. Decades of making successful decisions that add to whatever it is you want to do will pile up and compound and get you there. Waiting for that one big hit to get you to the stars, on the other hand, will not. Smaller successes build up your "success wealth", in the form of experience, connections, wisdom, knowledge, skill, and so on.
And yet we perpetuate the myth of the silently suffering, self-effacing, self-sacrificing hard worker who one day is finally rewarded for his or her efforts.
Having a self-sacrifice mind-set means consistently making decisions that benefit someone or something other than yourself, and often at a cost to yourself. Our culture often regards this as noble - perhaps it's a behaviour that makes society function better. It's a useful meme to keep around when you've already succeeded, certainly, but I don't think it serves us too well as individuals.
Having a self-sacrifice mindset means that, speaking metaphorically, you often make decisions that, instead of adding 10 points to your "success score", reduce it by a few points, and add a few more points to other people's. Having a self-sacrifice mindset means you consistently neglect your own success to achieve some higher objective - political, scientific, economic, social, etc. Having a self-sacrifice mindset means, I believe, that you are vanishingly unlikely to actually succeed at your lofty ambitions (assuming you have lofty ambitions, of course).
This is an extremely common mindset in the startup world. Many people think it makes sense to sacrifice everything for some elusive success that's waiting a few years down the line when their startup makes it big. They'll sacrifice their health, their social life, their appearance, their savings, their house, they'll quit their jobs, break up relationships that couldn't stand the pressure cooker, stop learning new things because "now is the time to get things done", and "there'll be time to have fun later, after the startup is out of the way".
In view of my observations above, that's a hugely damaging myth. I can reasonably state that, as far as I'm concerned, at least, this myth has cost me years of productive life. I personally could be much further towards my own objectives without this myth.
So what should we do instead?
An important way to solve this is to replace the idea of self-sacrifice with that of personal growth. Instead of making choices that benefit others, make choices that benefit yourself. Avoid things that cost you right now and have only a small chance of providing a return later (and be aware that we tend to be over-optimistic about what will happen later).
When faced with a choice to sacrifice something of yours (typically your time) for a so-called higher objective, reject that choice. Instead, find a way to make it a "win-win" - where you grow as a person and come out of it further ahead, no matter whether the higher objective is achieved. If you're going to work on a startup, plan things out so that even if it fails without making a single ripple, you'll still be better off after than you were before.
In other words, always optimise for personal growth, for building your "success pool" that you can leverage to go from smaller successes to bigger successes. Steer away from choices that reduce this personal asset.
Growth decisions provide you with:
- new knowledge and skills
- financial wealth
- valuable experience that you could not get in any other way
- time and energy to do more things (or fewer things)
- more control
This checklist can be useful when making decisions. Any decision that goes against one of these objectives (e.g. reduces your control, your connections, your skills) probably involves some amount of self-sacrifice and should be regarded with suspicion.
This isn't to say that we should all become selfish beasts concerned only with ourselves. We are lucky to live in a world where most of the really great opportunities involve delivering growth for many people at the same time. I'm not suggesting that we should focus only on personal growth - just that every decision should be optimised so that personal growth is part of the deal, and self-sacrifice is not.
I strongly believe that applying this mindset consistently for a long period of time can make an enormous difference to where you will end up.
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Monday, 25 June 2012
Don't register your idea as a company ✶
Me, in January 2011:
I want to start this new year with an admonition, for all those who are still working at a day job, and thinking that at some point they may want to run their own business, but who haven't decided to do so yet.
Register a business, today.
Joel Gascoigne, today::
When to incorporate is one of those topics which comes up time and time again, and there is much conflicting advice out there. I’m lucky enough to have a number of different experiences and perspectives with this, and I now believe that by far the best option in almost all cases is to delay registering a company for as long as possible.
So who's right?
Actually, both of us are, because we're talking about different things.
I advise people who are hesitating on the cusp of starting their own business to register a business right away, because this will get them over one of the biggest mental hurdles and force them into the company owner mindset.
However, there's no forced congruency between this business, which is a step towards personal freedom, and "registering a business for an idea". The business that I propose you register today, if you haven't yet, is the a business that will largely represent you. It can be used for many purposes - including as an incubator or even long-term receptacle - for ideas, but that is not its sole purposes. Registering a business for what is merely an idea with no real validation is, as Joel correctly states, not a good thing.
However, that doesn't mean you should operate without the protection of a limited company. A great many successful entrepreneurs that I know have several businesses, including one that they use for their various consulting and speaking gigs. Just because an idea starts in one business doesn't mean it needs to remain there always. As the sole shareholder, you are allowed and able to transfer the assets to a new entity as and when it makes sense - e.g. when you need to take on shareholders.
So, do register a business, but register it for you - not for an idea.
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Monday, 02 January 2012
Nominally, questorming is brainstorming with questions. In other words, it's a group technique designed to help a group of people to come up with creative solutions to a topic.
However, I've found it much, much more useful than that. One of the great uses for questorming is in Hypothesis Driven Development, where you explore a startup via questions, but there are many other uses for it. You can use it in any situation where you're trying to explore an unknown topic, by which I mean a topic where you think you know a thing or two, but you don't know what the boundaries of your knowledge are - i.e. a topic rife with unknown unknowns.
If Lean Startup is a method for developing a startup in conditions of extreme uncertainty, questorming is a method for exploring a topic in conditions of extreme uncertainty. It gives you a solid starting point which you can leverage into a fuller understanding of a topic that was previously a black box. It's like bootstrapping for your mind.
I've used questorming for everything from exploring statup ideas to drafting a book's table of content (the book didn't get written, but the TOC was solid!). Questorming is very easy to apply once you know about the technique, so I hope this will be useful to others too.
How to apply questorming
As the saying goes, asking the right questions is half the battle. This is what questorming focuses on: questions. The objective of the game is to ask as many questions as possible, in a free-flowing, unscripted way, about the topic. Much like with brainstorming, there are no bad questions in the initial phase - anything goes. As the storm of questions grows, it provides a map of your current understanding of the topic, and some clear next steps for deepening that understanding.
Here's an example. I might want to know more about how to write a book. For such a common topic, I could probably just find some texts on the topic which would teach me the basics, but many other topics (for example, any startup idea) don't have volumes written about them, so for those there is often no source other than your own current understanding.
We start with a simple question:
And free-flow from there:
- How can I not write a book?
- Are there activities that will increase the chances of me writing a book?
- Are there things that I absolutely must do to write a book?
- Are there things that, if I do them, will guarantee I don't write a book?
- What are all those things?
- Do I need anyone else's help to write a book?
- Is it possible to write a book without any help from anyone?
- What are all the key things that need to happen before a book is ready?
- What does it mean for a book to be ready?
- Is a book ready when I decide it's ready, or are there other factors?
- What are clear signs that a book is not ready?
- Are there some books that can never be ready?
- Can I do something to make sure that my book will some day be ready?
- What could I do to ensure that my book will never be ready?
- Is a book's readiness entirely driven by its content, or is there an external readiness too?
- What does the external readiness consist of?
- Is it ready externally when enough people know about it?
- Are there different stages of internal/external readiness?
- Does the external readiness help validate the internal readiness?
- Are they related?
- Can they be used to push each other forward?
- Why do I want the book to be ready?
- What do I want out of it?
- How does that relate to whether it's ready?
- Who am I writing this book for?
- Do they have any impact on whether it's ready?
- Can I find out if it's ready from the perspective of its audience, before actually publishing it?
- Do I even need to publish a book?
- Are there ways to publish a book so that it can be improved iteratively?
- Are those ways better or worse than traditional ways? Why?
- Are there benefits to publishing a book in the traditional way, vs a more modern approach?
- Which is better to match what I want out of this book?
Obviously I could go on... this is an exercise that ends when you decide it's over. For the purpose of illustrating questorming, I think this does the trick. Not all the questions are useful, of course, but on the whole, they provide a good starting point.
Within a few minutes of simply asking questions, I've identified several key actions to take the activity of writing a book to the next level:
- Finding out what sorts of things people do to get their books finished
- Thinking about what I actually would want out of a book
- Figuring out who I know that can advise or help with this
- Thinking through what I actually mean by a book being ready, and finding out what the industry means by this, and comparing the two
- In particular, exploring the interplay between a book's content and its market (perhaps in a startup-like fashion, where content is validated in some way before being developed)
- Defining my audience for this book
- Exploring traditional vs electronic publishing, and deciding which one suits me better
Of course, these concerns and starting point are deeply related to my own concerns and my knowledge of book writing - and that's exactly as it should be. They provide a map of what I know about the topic, and some next steps about how to expand that knowledge.
In my experience, no subject is safe from questorming. You can always use questorming to expand your knowledge of a topic, no matter how little or how much you know about it. That, in my opinion, makes it an incredibly valuable tool when operating in situations where there is often no authoritative source to tell you what to learn or think about next.
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Sunday, 16 January 2011
Dealing with a bad techcrunch review ✶
Update: Thanks to David Verhasselt for letting me know the link is dead. Luckily, I found a mirror here.
Josh Liu, London-based founder of MinuteBox, reacts to a bad TechCrunch review of his startup, and draws some key lessons:
- Great execution is key to getting your product understood;
- It is your responsibility to explain your product well, not the journalists';
- Not everyone will like your idea, and that's ok;
- Connect to the tech community to find the right team and/or cofounders.
This point is a familiar story:
When I was starting to work on MinuteBox, I knew no one in the tech community. I did not like social networking events. I was full of myself. I thought I had learnt a lot of things in business school. I just needed a developer and a designer to launch my business. Eventually, I found a developer and a designer through my friends. They are extremely nice people and were very helpful to me. However, they were not the right talent to execute the idea.
Friday, 20 January 2012
How to get actionable data from Google Analytics ✶
Another good post by Kristi Hines from the prolific KissMetrics blog. This one explains practically and in some detail how to set up Google Analytics goals and funnels and use them to learn about your website's conversion. This is quite an unexpected blog post, considering that KissMetrics sells a competing analytics solution, but the article is solid, clear and easy to follow. If you were thinking of adding funnel analysis to your Google Analytics but didn't know how, read this.
Monday, 30 April 2012
The Startup resume ✶
If you're applying to work at a startup, particularly if you're applying for a junior or internship position, you'd do well to read Justin Kan's article about what to put on your CV:
Overall, startups are looking for employees who are exceptional in the one key thing that they will be doing, whether it is scaling the backend system or doing the visual design. In your resume you need to 1) demonstrate that you are exceptional at the thing you do, and 2) not be disqualified by seeming crazy or imbalanced. A simple rule: if something on your resume isn't achieving one of the aforementioned two things, leave it off.
Having reviewed numerous CVs in the past, I can't agree more. Another point I'd add is that, if you're applying for a junior position and do not have significant work experience (summer jobs in fields that are completely orthogonal, e.g. retail, do not count), then make sure you mention those hobby projects which can actually give your CV some value. All too often, I see CVs where, for example, the applicant will mention that they are highly proficient in PHP or Ruby but there'll be no mention of what they actually did to become proficient. "I built an stargazing GPS-enabled app in my spare time" should definitely appear on your CV, no matter how rudimentary the app may be or whether it is "serious".
Large companies may not care about such "icebergs" of experience, but startups definitely will.
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Friday, 11 May 2012
A salesman and a developer go on a bear hunting trip.
They arrive at the cabin in the woods and start unpacking the car, moving stuff into the cabin, getting things ready for a week of bear hunting in the wilderness. The salesman quickly gets bored of this and says:
"Tell you what, you continue unpacking and getting everything ready, and I'm going to go and find us a bear."
The developer sighs and nods (he's used to salesmen), and continues setting up while the salesman vanishes in the woods.
Half an hour later, as the developer is about three quarters done with getting things ready (the cabin is now all neat and tidy at last), he hears a very loud growl as he comes out of the cabin. Twenty metres away, the bushes start shaking. Out shoots the salesman. Right behind him, a huge, snarling, drooling, roaring monster of a bear. It's twice the size of a normal bear, and it's very, very angry.
As the developer hides behind a chair, the salesman runs right up to the cabin, with the bear on his heels, and just as he's about to go through the door he quickly leaps to the side. The bear crashes past him right into the cabin, and the salesman deftly closes the door right behind, locking the bear in. Loud noises can be heard as the bear begins trashing the inside of the cabin.
The developer emerges from behind the chair. The salesman cheers and says:
"Woohoo! That's the first one. Now, you kill him and skin him, I'll go find us another!"
There are two ways to understand this story, and which way you favoured largely depends on whether you're a "builder" type or a "sales" type.
If you're a builder type, you see this as a great story that illustrates a common problem with salespeople: they don't seem to care about what happens after they make the sale. Actually delivering the project is hard work, but by then the sales guys have moved on to something else, so they don't care (and, as an additional problem, in some industries the salespeople will sell stuff that can't be realistically delivered).
However, if you're a sales type (like my cofounder, Paulina), you have a different perspective on this story. It's yet another story that makes fun of salespeople while completely discounting just how hard it is to not only find that damn bear, but bring it back and get it through the door.
Who's right, then? Both, of course. In business, you need both to find and sell clients, and the ability to then deliver what you sold them. One without the other is not a business.
Sales is not optional
Many people who "do startups" these days are from a technology background. In other words, they're builders rather than salespeople. And, like all builders, they tend to disregard sales as something that can happen later, something secondary that we'll solve when we get to it.
Well, sales isn't secondary. Speaking as a builder type myself, and having experienced businesses both with competent sales and without, I now believe that having someone whose job it is to go and find clients willing to give you money from day one is so important, that I would not start any company without such a person.
Sales don't happen without someone energetically pushing the product, service, or whatever it is you're intending to sell. Some may dream of products that sell themselves, like Dropbox or the original Apple II, but even awesome products like those took serious sales effort to get off the ground. Apple had Steve Jobs, one of the master salesmen of his generation, pushing the product everywhere he could and striking bold deals to get the company off the ground. Dropbox endlessly tweaked their referral scheme before they went viral.
Some few businesses like Google or Facebook or Instagram get to figure out the business model later. They can do without sales, perhaps. But this model only works in one place in the world, and unless you're starting up in the Silicon Valley bubble, your business is not a business without sales.
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Sunday, 23 January 2011
Self-employed vs business owners ✶
Derek Sivers makes a great point, illustrated by an engaging story:
There's a big difference between being self-employed and being a business owner.
Being self-employed feels like freedom until you realize that if you take time off, your business crumbles.
To be a true business owner, make sure you could leave for a year, and when you came back, your business would be doing better than when you left.
This is absolutely correct, and, as Derek mentions is straight out of Michael Gerber's E-myth book. Gerber makes a number of other points. I strongly recommend reading the book.
Thursday, 15 September 2011
Habits of effective startup mentors ✶
I've argued before that mentors are essential to startup success, but who trains the mentors? Can you get a mentorship mentor? As it happens, you can, and much like most coaches are themselves being coached, mentors usually have their own mentors.
That said, it's interesting to try and write down what a good mentor should do. Here's a list, by LeanStartupMachine mentor Giff Constable, of ten best practices for being a startup mentor. The habits are:
- Always start by defining the fundamental idea behind a product or service
- Prioritize the startup’s biggest risks
- Get practical on the tactics to empirically mitigate risks
- Use your network to find them potential customers
- Challenge, play devil’s advocate, and poke holes in arguments
- Let the team come to its own conclusions
- Less mentorship may be better
- Don’t spoon feed, keep feedback crisp
- Collaborate with other mentors
- Be a mentor, not a CEO
Get the details here.
Monday, 03 January 2011
Faking initial user interest ✶
This very interesting article from a couple of months ago comes via this almost equally interesting "AMA" ("Ask Me Anything") post on Reddit, about how to build a social entertainment website.
The key point is that some businesses need to solve a chicken-and-egg problem of getting significant numbers of users before more users will join. One solution to this, which sites like Reddit or the new darling Quora have used, is to fake the initial activity, to present a higher level than would otherwise be apparent.
Of course, this doesn’t mean put up false testimonials (“Great app; use daily! – Barack Obama), create fake real-time activity (extremely easy to spot), and fake your numbers (though I know plenty of startups that do, and it works).
Rather, you can engineer your appearance to give off a sense of size.
Worth a quick read.