November 29, 2013
English: Jim Collins (James C. Collins), an American business consultant, author of “Built to Last” and “Good to Great”. (Photo credit: Wikipedia)
Brad Feld interviewing Jim Collins, two of my favorite business thought leaders and authors talking about a topic that I extremely engaged in and interested in developing in Iceland. I was pretty bummed that I could not make it for the Startup Phenomena Event in Boulder, Colorado. There are a number of pearls of wisdom in this discussion. The most important of which is the concept of doing big things, focusing on the who and the role of luck or chance. I believe that in order to build an antifragile or lasting startup community it has to be a long term thinking which makes sense because doing things like this well… takes a long time. I believe the startup community in Iceland is starting to hum, the biggest lead indicator of this is when a young software engineer who came to me and wanted to work at GreenQloud, he was brilliant, talented and with a lot of energy so I was only thrilled to get him to join our team. 3 months in he wanted to quit and I was baffled because he loved the culture and environment that we are creating in GreenQloud, really liked the people he worked with and was really on board with the Mission of GreenQloud… when I asked him what has changed, he told me that he and his friends are doing a startup and they wanted to go out on their own and do that. I knew then and there the vision I had for Iceland is starting to take shape.
When really smart people are willing to risk their jobs, careers and possibly a lot of their time to build a company we have the right ingredients to building an antifragile startup community. What is really missing is the Big Hairy Audacious Goals that Jim Collins referred to in the talk. I have some ideas up my sleeve, GreenQloud is one of those big ideas. If you have not been following what we are doing with GreenQloud, you should really look at it. I believe GreenQloud could be a bigger company than any company built out of Iceland and I am not saying it because I am the CEO. GreenQloud is in the business of changing the world and it takes time, effort and passionate people. We are on that journey and starting to really accelerate our execution. I also have a couple of projects that I am really excited about launching, you will hear about it in the near future. We are currently kicking off the preparation for Startup Iceland 2014.
November 28, 2013
Brad Feld had a very interesting post about Bitcoins and Fred has been a fan of Bitcoins. Given that I was working on my PhD in Economics it was only a matter of time before you heard about my 2 cents just kidding about the Economics part… I valued the learning and relationships and network but application of those principles in real life always falls short of anything useful. I apologize to all my Economics Professors, as one say ”Its not you… its me” problem. Lets define what is desirable in a medium of exchange, we don’t have to re-invent the wheel on this we can logically determine what are the characteristics of a good medium of exchange…
- Needs to be accepted by providers of value i.e I should be willing to denominate any good or service that I provide in that medium of exchange a.k.a currency
- Needs to be able store its value as a self contained unit with someone backing the value, in market terms a market maker i.e someone willing to buy it from me for something else of value at all times (BTW, that is one of the big functions of Central Banks we can argue until cows go home whether it is right or wrong). Market makers provide liquidity to the system. Unfortunately self governed systems seem to lock up when there is trading frenzy. The last sentence in itself warrants a blog post and several books have been written explaining this.
- Needs to be portable, transferable and safe… ie not lose its value due to external factors. This is the hardest one to maintain because value and safety are functions of resilience and foundation.
There are lot more, like it needs to be divisible, available, transportable etc but for me the above 3 are very important. Given these things do I believe Bitcoins can live upto it? yes it is possible but in the near future not really sure. I think the problem we have is Bitcoin has become a medium of speculation rather than a medium of exchange. I think speculation is not a bad thing but if that is driving the frenzy then it violates the 2 characteristic that I listed above. No-one would be talking about Bitcoins if its value has not be gyrating like a giant seesaw. I think the crowd mentality to follow this “frenzy” is crazy, reminds me of the dot com bubble and then the financial crisis. I like Warren Buffet‘s response
I have never understood the speculation on Currency because that usually does not create any value and if one has market moving capabilities like Fred Wilson or Brad Feld, maybe they can create value out of this. IMHO, they are not interested in the speculative nature of Bitcoins but more the reason to reduce friction on the transactions on the internet. When one looks at Bitcoins as a way to disrupt the online transactions market it makes a lot of sense. As anyone who has sold anything on the internet can tell you the transaction cost per transaction is quite high until you get to scale because the ultimate settlement is still done the traditional way. I shake my head everytime I am charged $25/wire transfer by Bank of America online banking. Makes no sense! Bitcoins and other ways of facilitating online transaction that reduces friction is of considerable value and they basically can disrupt the strong hold held by transaction settling companies like Banks and Credit Card providers.
November 19, 2013
While you transition your company from being a idea to a startup to a small company to a big company there are many things you focus on. Building a company is a complex task. I have written before about how your Focus Determines your Reality, successful people have created a habit of being focused on things that matter to them. It is difficult to do when have so many distractions and it is also easy to be distracted sound and look busy and get nothing accomplished. While you are trying to figure out what problem to solve at the early stage of your startup it is good to experiment, try many things and distraction is actually a good thing, fires those synapses that have not been used, however once you have find that one idea that solves the product to market fit it is imperative to kick yourself into the mode of execution. Execution cannot be done without focus. We need to organize and execute around priorities and what determines your priorities?… yes, you guessed it right! Focus. Put first things first and organize your activities around that. It cannot be simpler than that.
November 14, 2013
I have been having a very interesting discussion with my technology team, and I was made aware of this article in Forbes written by Anthony Wing Kosner with the title “Stanford vs MIT: How Marketing Trumps Technology in Startups“… before you all start sending me flame mail, I am not saying Technology is not important just that Marketing trumps Technology and please read the article and read the argument below. Fred Wilson of AVC.com started a huge uproad when he took a swibe at Marketing here and he corrected himself by saying that his blog post was a bug. I think there is marketing and there is marketing… I believe Marketing is telling a story about your vision, value and why you believe anyone should use what you are making or envisioning. Seth Godin had a very response to the original post by Fred. Marketing != Advertising, lets think about this, when you are building a startup, it is an experiment until you figure out the Product to Market fit, and while you are doing that experiment you still need to tell your story. If you are not telling your story nobody really cares to ask you about your story. Sequencing marketing activities and team buildup is an important skill and IMHO an art i.e when do you scale the marketing team. I believe very strongly that while you are experimenting in figuring out the product to market fit you still need to spend resources ie. time, money, people in telling a story, it sounds extremely counter intuitive to Engineers, how can you tell a story about something you have not built yet… that is the visioning part of your startup. If you cannot envision the value, the problem, the solution and the experiments to find the market that you will serve, you are just pandering to the builder in you. In addition, even if the product you have built is great, without marketing there is no way to scale it to a point where it starts selling itself. This is a tough pill to swallow especially for Engineers and Technologist, who love the building part but don’t really care about the Marketing and Selling part. There is a point in time in your startup life you need to deal with this challenge. What I have found is that European/Scandinavian/Nordic Startups due to cultural reasons do not want to tell a story before they are sure that there is a story where as Startup in the US are much better at this. It is no magic that most successful startups come out from across the pond. I know I know hate me but the data does not lie.
November 12, 2013
Icelandic Startup Plain Vanilla Games launched their new game Quiz Up and it has been getting a lot of attention and has been in the top 3 in the Apple App Store. I played the game and it was a lot of fun. I wrote about Plain Vanilla Games here and Thorsteinn their Co-founder and CEO has been a speaker in Startup Iceland Conference. I promise there is a point to my writing about this and not just a plug for Plain Vanilla Games or QuizUp. I remember Thorsteinn pitching in a Seed Forum Event 2 years back and I remember him talking about how he got a Venture Investor in the US to invest in the company and the rest is history. I find that very strange and interesting, how come the minute a VC investor putting money in a company an Entrepreneur turns out a big hit? Is there some magic that these US VCs seem to carry with them and their investments? Well, as much as I want to say there is a secret sauce and magic, there is none. It is all hard work to develop a product or service and a lot of partnering, hustling, marketing and selling. It takes time and effort to bring a product to market. I am really please to see Icelandic companies break the mould and are starting to venture out and be global. I hope with the success and role models created by these entrepreneurs we will have more investors wanting to participate in this journey in Iceland. Angel and Venture investing is a lot of hard work and value creation tied with investing unlike buying a stock or bond in the market where the part of the returns are driven by speculation and market dynamics. I have created an Angel Syndicate to motivate more people to co-invest with me in building the startup ecosystem in Iceland. I always put my money where my mouth is. I know there is value in Iceland. I can go all day about why I believe we can create global companies out of here, there needs to be a conscious vision, strategy and execution to make that a reality. Doing that right is the key, and investing in creating an environment that is conducive to that is a must have. We cannot guarantee success but we can reduce the odds of failure. I think with each success like Clara, Plain Vanilla Games, Betware (Betware was acquired by Novomatic, that news item is for another blog post) etc we are reducing the odds of failure in Iceland. With the syndicate that I have created, we will be doing $1m worth of early stage investing every year, in my humble opinion if we are able to get this going it will transform the Icelandic startup ecosystem.
November 11, 2013
I have been on the road for the past 2 weeks related to my role as CEO of GreenQloud. We had a number of initiatives and the company is on a nice growth trajectory. We are starting to get great customer engagement and team engagement. The team has grown to 27 people from 11 a year back. While I was on the road got a chance to meet with Forest Key, the CEO and Co-Founder of Buuteeq, the company that my partners and I invested in 2011. It has been fascinating to see the growth of this team. Buuteeq now employs about 106 people and doing really well in terms of growth of customers, revenue and all the key metrics that drives the company. I was very happy to see that we are investing in the right kind of team culture and things that we believe in. While I was talking to Forest, I asked him how has he and his leadership team managed to build a great culture at the workplace and maintain the super aggressive growth in the number of employees and his answer was very simple… Team Engagement and a tool. He pointed me to Tiny Pulse, a simple tool that he and his leadership team use to engage with their team members. It is such a simple tool but brings a very high level of engagement as well as allows to get direct feedback on a regular basis from all the team members.
The important thing is to act on those feedback items and I congratulated Forest on really driving the engagement and growth of the company. I am pretty sure we will do well with this investment. If you are in the growth path as buuteeq or greenqloud, I highly recommend using Tiny Pulse, I was quite impressed with the philosophy behind the company, it is based on the book by Tony Hsieh, Delivering Happiness. We are strong believers in that philosophy at GreenQloud … so it was easy for me to institute the same with the team.
October 23, 2013
I have been listening to the Checklist Manefesto book by Dr.Atul Gawande. I have to say I am really digging it. Written by a surgeon about how we as humans overcome our ineptitudes by becoming disciplined and by creating checklists and by relying on team wisdom to make complex decisions. I can relate to this, I believe very strongly that once a good team gels together any complexity can be overcome, it is not blind faith but a measured observation of how great teams work. They communicate, create checklists, supplement one another and collectively work to achieve insurmountable odds. Putting a man on moon, constructing skyscrapers, brain and heart surgery, building complex machinery etc we should take time to look back and see how we as a human race have overcome incredible odds to survive as a species…despite our incompetence, wars, prejudice, fallibilities and epistemic arrogance and black swan events.
If you are building a startup or if you are an entrepreneur, I would highly encourage you to read the book. Building a company is a complex task and without yourself being disciplined and following disciplined process, you cannot build a disciplined team that is empowered to execute, make decisions and create value.
October 18, 2013
Let me give context before I jump into why I believe this is one of the most important philosophical ideas for an Entrepreneur or a Startup. We had a company retreat for Strategic Planning and Alignment within GreenQloud. We are starting to become a big enough team that we need to get away from our office. We used the material from the book Good To Great to set the context and ask some fundamental questions about what we are trying to do. It was extremely interesting and insightful for me to get input from everyone in Team GreenQloud. We went through the 12 Questions individually and discussed each ones input. While we are going through the question, one of the question was
What are the brutal facts, and how can we better live the Stockdale Paradox?
As Jim Collins explains it in the book
The Stockdale Paradox
Retain faith that you will prevail in the end, regardless of the difficulties. AND at the same time. Confront the most brutal facts of your current reality, whatever they might be.
The idea is based on James Stockdale, a naval officers experience being a prisoner of war in Vietnam. This concept was is also shared in another great book, “Man’s Search For Meaning” by Victor Frankl. I have written about Victor Frankl. I am not sure why Jim Collins decided to call it a paradox because for those who go through the Struggle, it is not a paradox it is how you get through the struggle. One has to face the brutal facts and have faith that one will prevail. I believe this is what every successful entrepreneur does, those who walk through the fire understand and can relate to the above statement. I am fortunate to have had the above experience, there were many time in the last 5 years where I have stared at the abyss, with not many options in front of me but something in me provided the faith that I will prevail in the end regardless of the difficulties. It was not blind faith, but faith that allowed me to move one step forward by facing the brutal facts and reality. Look at problems as opportunities to improve a relationship or really work on my creativity at problem solving or use the problem to bring new people/ideas on board to try to work through it as a team. There are many strategies for dealing with things, but the most important strength is the inner ability or powerful Will to believe you will prevail.
October 15, 2013
The mission of this blog is to be a resource for entrepreneurs, startups and everyone who wants to learn about the entrepreneurial life. Why I do this is because I have made it my mission to build an antifragile startup ecosystem in Iceland. I have written a lot about how my analysis of why this is not such a bad idea and how I am also putting my money where my mouth is. In continuing with that development, I was happy to see that Startup Genome project has included Iceland as a region. If you have not explored it, you should. I would encourage you to go and enter your company in the Startup Genome Database, it is a easy way to keep track of all the companies that are being created in Iceland. In addition to this, I would recommend that you go and register yourself and your company in AngelList, Crunchbase etc do the work needed to get your name out into those places where people are searching for Startups. It is important aspect of building a company and your startup.
Toti suggested another brilliant idea that came out of another Startup Community that is very similar in development stage as Iceland, Portland. Portland has an online calendar that lists all the activities that are ongoing in the Startup Community, called Calagator which is a unified calendar for the technology community of Portland, Oregon. It is an all-volunteer effort and they encourages anyone to import, create, and edit events. I think having something like that will be awesome for Iceland. I also think It is great way to schedule events and see in a glance what is going on in the area or region. Of course given that everyone who is part of the Startup Community is in one of the Facebook groups is a great thing in Iceland but it might also prevent new people from getting to know about the Startup Community in Iceland. Having an open calendar that is crawlable by Google or DuckDuckGo or Bing or whatever search engine of choice, enable serendipitous discovery of meetups and new community members joining this growing community.
Toti has volunteered Mobilitus and I have volunteered GreenQloud to host this application build using an open source software from to have Iceland’s own Calendar of Events. I think both of these online resources need to be kept upto date, so we need you all to participate and update your startup or a startup you know into the Genome. Add a calendar event to the new TBA calendar for Iceland.
October 10, 2013
I have more or less documented the journey since the day the Financial System in Iceland collapsed in 2008. There has been a lot written about October 8th, 2008, the day when the Prime Minister of Iceland addressed the nation stating the challenges in front of Iceland and the collapse and ending the speech with the most famous last words for a politician whose career was pretty much over… oh, yes the famous words were “God Bless Iceland”! there was total disbelief within the Icelandic community. I don’t want to go into the details of what happened after that I think many people have done that. What I do want to do is describe what I did, I decided right then and there that there was only one way to rebuild the business community in Iceland and that was through re-inventing what really creates value in Iceland. I was very impressed with the Design, Software and Infrastructure talent in Iceland and so I decided that I would invest my time, effort and money in building that sector. We invested in a team of Entrepreneurs and they won for Iceland. After I have been working with the Entrepreneurs, it was obvious to me that Startups and Entrepreneurs in Iceland needed more than just Angel Capital (it was non-existent then). I actually built a presentation on Why we would invest in Iceland and what Icelandic startups needed. Here is the first iteration of the Investment Thesis and Strategy that I created. What is important are the above 2 questions, in terms of What Icelandic Startups needed then and what they still need now are 3 things:
- More Seed and Angel Capital
- Mentoring and advising on developing, marketing and selling products/services to the Global market
- Bridge to a bigger market
the reasons why I felt we should invest in Icelandic Entrepreneurs was based on again a bunch of things:
- Young demographic
- Well educated and technology savvy population
- Excellent infrastructure
- Cost effective (hiring/training a software engineer in Iceland is much cheaper than say New York or London)
- Entrepreneurial culture
- There was lot of emphasis on Design, Innovation and Creative industry
- Small market is great for customer validation and to find the Product to Market fit and easy to pivot a product or service strategy
I naively thought that I could present this to the investor community and create a Venture Capital firm, I went to every pension fund and Asset Management company. Presented the idea, just to be laughed out of the office. It was rather humiliating, when they asked why I thought I could do this better than anyone else? it was a very valid question and I asked myself that question. At that time it was not something that I could quantify as we had just done a couple of investments and jury was out on those investments. Fast forward to 2013, we have the track record, all the investments that we have done are alive and kicking and are doing very well. CLARA was sold to Jive Software and I can say without exaggerating that every single person who invested in CLARA got their money’s worth. Buuteeq is growing leaps and bounds and I am pretty sure they are going places. The funny thing about these investments is that we went in with no expectation on when the companies will win or when we will get our money back, we wanted to help the Entrepreneurs and did some common sense thinking on the deals and made sure it was a Win-Win deal for us and the Entrepreneurs and we spent considerable amount of time helping the Entrepreneur. It is not for everyone… but we just love it. I love helping Entrepreneurs, I meet every single one of them and give them my time, my connection and whatever else I possibly can. Founding Startup Iceland the Conference was based on that philosophy of doing something to help the Entrepreneurial community in Iceland and to build a really vibrant community of Startups and Entrepreneurs in Iceland. That vision has not changed and I am pretty sure that we will get there, but we will not get there if the community does not invest.
I understand that investing in Startups is risky, the results are not guaranteed and it is a lot of work but nothing worthwhile is easy. I am willing to work my fingers to the bone to get this community built in Iceland. The Angel syndicate is platform to crowd source capital. Everyone keeps talking about how Pension Funds should be investing in Startups etc I think that is baloney… Pension Fund Managers do not have the time to work with Startups what they need to be doing is investing in Platforms and People who are investing in Startups. Unfortunately in Iceland, this community has not developed because there is no history to really creating a huge win in a Startup until the last couple of years. Through the syndicate, we can really harness more than what everyone thinks is possible. Raising capital is hard anywhere but it is extremely hard in Iceland if you are not part of the inner circle. I want to disrupt this, I want everyone in Iceland to have an opportunity to participate in this journey.