The 10 Commandments of Startup Success

Tim Ferriss has a great compilation from the "Masters of Scale" podcast titled "The 10 Commandments of Startup Success with Reid Hoffman". Here are the commandments themselves (along with the audio time stamps) including some quotes and extracts from the audio that I found especially interesting (in italics).

1: Expect rejection. [09:14]

2: Hire like your life depends on it. It does. [19:26]

“A combination of Persistence and Curiosity (what you care about) is a great indicator of future success of a knowledge worker” - Eric Schmidt

“For sales, we hire Olympian and football players, because it indicates the level of discipline they have developed at an early age.” - Eric Schmidt

“Are your people self confident enough to have people stronger than them around them. You should never hire someone to work for you who you would not like to work for (in an alternate universe”)” -  Mark Zuckerberg 

3: In order to scale, you have to do things that don’t scale. [25:37]

4: Raise more money than you think you need — potentially a lot more. [36:18]

"Take the money whenever and wherever it becomes available. You never know when funding might become unavailable." -Reid Hoffman

5: Release your products early enough that they can still embarrass you. Imperfect is perfect. [44:45]

6: Decide. Decide. Decide. [1:00:16]

“The fighter pilot who has the faster OODA loop wins. The other one dies.” - Silicon Valley saying (OODA = Military origin decision cycle of Observe, Orient, Decide and Act.).

Commandment 7: Be prepared to both make and break plans. [1:03:13]

“Figure out what your systems are going to be later (when you become a larger company) and do it now” - Sheryl Sandberg. (She provides the “not so silly” example of how there was resentment among employees when Facebook - since it had become large so quickly - had to take back its practice of celebrating everyone’s birthday.)

8: Don’t tell your employees how to innovate. [1:07:21]

9: To create a winning company culture, make sure every employee owns it. [01:12:32]

Netflix compares themselves to sport teams (which is about performance) and not family (since the latter implies unconditional love).

10: Have grit and stick with your hero’s journey. [1:23:22]

11: Pay it forward. Use the momentum of your own success to move the success of others. [1:26:03]

Marc Andressen with Tim Ferriss

Click Here for this good interview with the founder of pioneering web software firm browser Netscape and disruptive VC firm Andreessen Horowitz.

Parts I liked best:

Difference & Similarity between VCs and Value Investors [42:25]

"Anything Warren Buffet is willing to invest in, we run screaming in the other direction. He invests in Heinz Ketchup since people have been using it for over a 100 years and therefore it's a good guess that they will continue to do so for the next 100. Basically, he's betting against change and we are betting for change. When he makes a mistake, it's because something changes that he doesn't expect; we make a mistake when something doesn't change.

But what both schools have in common is Original Thinking and the willingness to look at things as they are ("the core of the business") as opposed to what somebody says about them or it's believed to be. Also, Value Investing is the only place in the market where there's Long Term investing."

Importance of inculcating a Culture of "Building Things" [44:50]

"Smart People Should Build Things" (based on a book title) and "Be So Good that they can't Ignore You" (from the book Born Standing Up by Steve Martin)

Importance of Reading Biographies: "Technology changes; people don’t." [22:28]

"While following contemporary stuff is good, I find it more useful to go further back and read (well written) Biographies about Edison, Disney, Ford, Rockefeller, etc."

How he deals with FOMO (fear of missing out) when it comes to investing [38:47]

Why he does not believe AI is going to either kill jobs or people . [48:01]

Quick Link: Why, like the Gazelle & the Lion, Entrepreneurs Too Cannot Afford to Stop Running

Nice translation of the great Gazelle-and-the-Lion quote (attributed to Thomas L Friedman) to the entrepreneurship context by Jackie Dismore of Luvali Convertibles (which makes various types of "two in one" clothing & accessories) in her Entrepreneur on Fire interview.

“Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion, or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle, or it will starve to death. It doesn't matter whether you are a lion or a gazelle. When the sun comes up, you better start running.”

I liked her emphasizing that, even if an entrepreneur feels that he is "on top" - i.e., like a lion - he/she cannot afford to relax. Else, someone else is going to eat their lunch!

"I Like/I Wish/I Wonder Meetings" - Way for Startups to Train Away Authority Bias?

In a fascinating recent lecture at the LSE, Swiss writer and entrepreneur Rolf Dobelli (author of The Art of Thinking Clearly), talks about the various common "thinking errors" that we committ. Here are a couple of them:

Sunk Cost Fallacy 
If by mistake - in the same week - you have paid a non-refundable prices to vacation in two different cities, Paris (which is your favorite city where you are sure to enjoy yourself the most) and Rome.If you have paid $4,000 for the Rome trip and $1,000 for the Paris trip, where will you go?

Answer: Go to Paris!

"If it's non-recoverable then it should not have any bearing on our decision. It is irrational," Dobelly says. In a business context, this error causes good money to be thrown after bad. Eg: the Concorde aircraft was kept alive well even after it became clear it wasn't going to make money just because too many millions had been spent in developing it.

But avoiding this error might not be too easy in familial settings as the author himself relates: "The weather and setting at our Swiss home was beautiful and I thought I would like to just watch the sunset and relax. But my wife has bought expensive movie tickets and said we should go. I told her: "Honey, that is a thinking error". She 'loves' it when I say that."


Authority Bias
People tend to over value/follow blindly/not challenge someone who is seen as an authority. "Whenever we are in presence of an authority figure, we stop thinking clearly."  This can be dangerous for example, if a junior co-pilot, who even when he notices the Captain make a mistake, does not point it out. In 1977, 600 people died when two 747s crashed in to each other owing to such an error. As a result of this, the airline industry has "trained away" authority bias by insisting that, as part of each pre-flight briefing, the Captain will say to the co-pilot, "I'm not the Pope; I'm not infallible; I will make mistakes. If you see me make a mistake, please speak up." (Download the full podcast from here)

While the founders of the news aggregation software Pulse (that was acquired recently by LinkedIn) were not specifically referring to the dangers of authority bias, their practice of asking their employees to speak up about any concerns in their Friday all hand meetings - titled "Ask Absolutely Anything of Akshay and Ankit (AAAAA)" - seemed like a good way for startups to achieve this. "It's better to have small quakes (than a big blowup)," they put it in their Stanford e-corner interaction. The employees can bring anything in the forum as long it starts with "I Like" or "I Wish" or "I Wonder". (Download the full podcast here).

"It's all About the People" - The Truism that Stays True

From a Mixergy podcast interview with Dr.Rajiv Kumar of US-based corporate wellness service ShapeUp. (Emphasis mine)

What’s the one takeaway that you have? One thing that you say, hey you know, I am better because I have this one understanding after having built this business.

Rajiv: Yeah, I think it would probably sound very obvious and maybe somewhat cliché, but at the end of the day, every single thing that a business does, successes and failures, are all about people, and can’t underestimate that. I think we know it, but we forget it sometimes. But it is the people that makes everything happen or makes thing not happen. There’s a huge opportunity cost to having a wrong person in a position, and you don’t realize that opportunity cost until that person leaves, and because either there’s a void and you realize that this person was actually dragging the company down, or someone who comes in that’s much better and you realize how much more quickly you’re accelerating. And when you have that right person in place, magical things start to happen and it really has an amazing effect on the company.

And so, at the end of the day it’s all about the people and you can’t invest enough in people and culture. I think in early parts of start-up companies, often you just focus on the product or the vision or whatever it is. You don’t focus as much on people and culture. But it’s true. It’s not just smoke and mirrors or just something that people are paying lip service to. It is all about people and we need to optimize our companies around investing in people and finding the right people and keeping the people that we have happy and motivated.

What Steve Jobs Did Not Want You to Know about Apple

(Pic from Betanews)

Stanford’s Entrepreneurship Corner series has another great podcast featuring Adam Lashinsky, Senior Editor-at-large, Fortune Magazine.

Here's Stanford's summary for this podcast:

Adam Lashinsky, Fortune senior editor-at-large, shares an insider look at Apple, one of the world's most iconic and secretive companies. Based on his research into the technology giant's internal processes and approaches to leadership and building products, Lashinsky offers insights and surprises from his book, Inside Apple: How America's Most Admired--and Secretive--Company Really Works.

Highlights (in our view):


* "Your Business is None of My Business"

- Even employees who worked on one part of the product get to see the final product only when it's released to the world.

- Results in effectively NO Politics in the company - after all, if you don't know what I'm doing, how can you politic about me?
- Very unlike Google (which offers free food so that employees can mingle in the cafeteria).

* The Benefits of being Secretive (with consumers before launching a new product or a new version) or
Why Apple will say NO to rumours about New Product Launches (like the Apple TV) "until it is ready to say Yes"

- Provides the opportunity to Delight Customers
- Consumers will stop buying the current product/version if they know a new version is coming out soon
- The Story about a company should be about its products

* Say NO to New Projects - Take Big Bets, But Few Bets

- Apple has launched 5-6 products in the last 15 years (Very unlike Google again)

* Spend Right

- For a 30 Second Movie Ad Clip for a product, the company spent millions to get the commercial Just Right

* Culture of Work (Not Play)

- People crave to work for Apple not for the pay and perks, but to do better work and feel privileged for it.
- It's not clear if Google's success is correlated to its being so employee friendly (in terms of free food and other perks).

* Headquarters Centric Company

- Everyone Important in the Company is based in Cupertino - so that they can have Face to face meetings!

* No fiefdoms - 1 P&L, 1 Ad Budget

* Working in small teams preserves startup culture

* Obsession over details leads to excellence
Jobs is famous for checking the screws on the INSIDE of the mac.

* Ignore Customer Research - Before a Product is Launched 

- Because "They don't know what's possible"

Listen to the audio from here (mp3) - 57:31 Minutes, 26.5 MB.
(Use Right Click > Save As to download to your desktop)


PS: In his Death Certificate, Steve Jobs's family entered "Entrepreneur" for Occupation. Wow!

Google Culture: Is it for all startups?

There is a perception, given how successful Google has become, that all kinds of policies the company adopts – like 20% time for employees “own projects”, free gourmet food, etc., etc. – is something that all start-ups should adopt. As we listened to the following podcast from an early employee at Google, we made notes on what start-ups should definitely ape. – The Venture Intelligence Team

Marissa Mayer; Vice President, Search Products & User Experience (Bio)

Source: Stanford’s Entrepreneurship Corner

The Full Podcast (mp3) - 48 Minutes, 21.9 MB

(Use Right Click > Save As to download to your desktop)

Highlights of the talk (links point to corresponding video snippets):

• Hire the best you can and base decisions on detailed facts and figures
  

• No one at Google can get away by presenting an Executive Summary which cannot be backed with data. Everyone down from the founders will insist on drilling down to the data
• This academic culture at Google – “Stanford with Stock Options” – has helped minimize internal politics. Since decisions are taken based on facts and figures, it’s difficult to point fingers and say this project got approved because of favoritism, etc.
  

• Provide complete information to employees and they will then prioritize their jobs
  • Until a few months before it went public, Google used to share revenue nos with all employees
  • 50% of the products launched in the second half of 2005, came from “20% time” projects