Archive for March, 2012

March 31, 2012

Entrepreneurship is difficult

Actually, I wanted to have the title of the post as “Life is difficult”,  I believe Entrepreneurship is Life because it starts to consume everything you do. To quote Steve Jobs, if you want to do great things you have to love what you do and when you love what you do you give every ounce of your time. “Life is difficult” is the first sentence that was written by Dr.Scott Peck in his classic book The Road Less Traveled.

I find a lot of application to the tools that he referes in his book to entrepreneurship and startups. I have emphasized the importance of teams but even more important is the mental strength of the team. If we build startup teams that accept that doing startups is difficult then the process stops being difficult. I also want to embrace the tools that I believe should help every team member to strengthen their mental ability. Mentoring a startup team is ensuring that the team has the right support at the right time so they have the capacity to deal with challenges. So what are these tools that Dr.Peck talks about? there are 4:

  1. Delaying gratification
  2. Accepting responsibility

    Cover of

    Cover of The Road Less Traveled

  3. Dedication to truth
  4. Balancing

Delaying gratification is the ability to be patient to obtain something you want. Why is this an important trait in a team member? well, if you think of a startup, you have limited resources and you are always trying to allocate that limited resource to the right activity so that the company goals can be achieved. Goal setting, prioritizing and achieving them is a function of this trait. If you are unable to prioritize and delay gratification you waste the limited resource.

Accepting responsibility is the ability to take ownership of tasks related to the company and executing it. It is also the ability to constantly asking yourself if the time you are spending is in the right activity as it relates to the companies’s goals. More importantly, when things don’t go as planned, having the courage to tell yourself that you are responsible for your time, your task and your goals and not blame others in the team or the government or the environment or tax law or the economy for the position the company is in. If every team member of a startup takes responsibility for the collective goals of the team, usually all challenges can be overcome. When teams do that it is the most fulfilling feeling. I have been part of many team that executed that way and believe me it is an incredible feeling to be part of such a high power team.

Dedication to truth, everyone should dedicate oneself to truth, truth is reality. Most of the assumptions that one makes while working on a startup has to be validated to be truth. Remember the definition of a Startup, creating something new of value under conditions of extreme uncertainty. If you shroud your judgement with falsehood the results don’t really line up. I think this is by far the most important of the traits. This is also the trait that allows teams to act, if the team accepts that something is untrue then we can take action and try something new. I always remind the management that bad news never gets better with time, bad news is bad news, we have to deal with it. The team does not have the courage to change when it is in denial. There are many instances when this is true, for example, you launch a product and you had assumed that you will have a conversion rate of 10% and the actual conversion rate is 1% what should you do? If you dedicate yourself to truth you will tell yourself that your hypothesis was incorrect so you have to change the strategy. What if you believe that the rate will improve over time? wait, wait and after you have burned all the resource you realize that it never worked, but if you hold onto falsehood you blame the government, the team, the market, your potential customer whatever to hold to your belief. That is just sad. I find this to be the biggest problem with early stage startups, they hold onto their hypothesis, idea, whatever like gospel and they don’t have the courage to face the truth and change their assumptions.

Balancing is the technique of flexibility. Many a time we function with rigid, set patterns of behavior. Extraordinary flexibility is a must for successful entrepreneurship. Part of this technique is also learning to give up something that is dear and familiar to us. In refusing to suffer the pain of sacrifice, we fail to truly grow. It is in giving that we gain more. There are many instances when you need to give up on feature for launching the product, you need to have the ability to balance these conflicting requirements.

All this comes back to Investing and Mentoring, I talk to many people in Iceland who are investors and they devote no time to understand or coach the team that they invest in. When things don’t go as planned they blame the culture, size, their lack of network outside of Iceland etc. I reject that notion, I think… no I believe we can build fantastic startups in Iceland and make them grow into world class companies, but the path to that is paved with hard work, effort and ensuring every stakeholder spends the required time to contribute. I don’t know if I will be successful or not but I know I want to do great things and I love what I do, once again quoting Steve Jobs, you cannot connect the dots looking forward, you can only connect them looking back.

March 30, 2012

Customer Development and Running Experiments – 9th Meetup

We tried a different method to capture our discussion this week using SoundCloud.com and I have to say it works like a charm, here is the SoundCloud stream, fresh off the press.

We discussed the January 18th, 2012 class Customer Development and Running Experiments session, especially the presentation by Giff Constable on the process of running experiments. I really like the down to earth style of describing the steps involved and giving examples of what one could do to test the hypothesis. The Sound Cloud link is about 1 hour and 6 minutes long, this is the first time we are using this technology I listened to it and it sounded fine. Haukur Gudjonsson, talked about Bungalo.is and how they launched, worked on the MVP, talked to customers, ran experiments and now it is starting to become a viable business. I really like what Haukur is doing.

March 29, 2012

Should overnight success take 11 years?

Saw this post on Facebook about Mr.Thordur Magnusson, the Chairman of Eyrir Invest. Eyrir has been one of the private venture investors in Iceland and they have strong track record in their portfolio like Caldiris, Marorka, Ossur, Marel etc all household names in Iceland. They have a strategy of Buy and Build, which means the Eyrir team takes an active role in the running of the company, actually it is an oxymoron I don’t know of any Private Equity or Venture Investor who is hands off, anyways, that discussion is for another day. I liked one of the statements Thordur made which is Eyrir’s overnight success has been 11 years of hard work. Again, those who have not done this always get surprise how long it takes to start, build, scale and make a company resilient and sustainable. All things take time, especially when you are building things, because a startup is an experiment and it takes time to really figure out the product to market fit, developing a sales and economic engine, constantly fine tuning the business model, keeping people motivated about working for a purpose than money etc I am amazed when we start listing these things there are so many intangibles that have to be in place and if we slack on anything it would lead to the ultimate demise of the effort. As much as I want to believe that it takes time to build something, it does not have to that way, when we want to learn a skill we take a class or practice it and get better at it by repeatedly doing it. Of course it takes time to get really good at it, Why cannot the same thing be applied to startups and entrepreneurship? We all don’t have to re-invent the wheel, lets just learn and adopt the wheel making strategy and try to improve on it. I really like Brad Feld and David Cohen‘s book “Do More Faster“, I think it aligns and sequences a lot of things in place when you want to do a startup, combine that book with the “4 Steps to Epiphany“, “The Lean Startup” and “Business Model Generation“, you have all the required knowledge in place. But these books cannot teach you discipline, persistance, resilience and just being a hustler (street skills, which is getting stuff done!). This is where the team comes in, I have written a lot about Team Composition and how picking startups to bet on is an Art and not Science. You should have been in picking teams business for a long time to understand how team dynamics work and picking the right skill set. Fred Wilson wrote about this a couple of days back on how betting on startups in like playing poker, and to get really good at poker you need a lot of skill, practice and I guess Chutzpah.
I want to disprove this myth that it takes a long time to build a company because there are many examples where that is not the case. It takes a long time to build a successful global companies but resilient and sustainable companies can be built in a shorter period of time. I like to invest in the mess like Fred says.

March 28, 2012

CCP Keynote EVE Fanfest 2012

It is a long video almost 2 hours long but it is well worth it. Check out the partnership with NVIDIA where the graphics is being made incredibly realistic and I was there and it was brilliant in a huge screen. Check it out.

March 28, 2012

Reykjavik Digital Freedom Conference

First the logistics, the conference is in Bíó Paradís, Hverfisgata 54, 101 Reykajvik. Here is the link to the site and here is the Facebook Event Page. I planned to attend this conference but unfortunately, have a whole bunch of meetings and commitments that I cannot get out of is preventing me from participating. There is an event in Faktory in the evening, maybe I will go there. The speaker line up looks interesting, however I have a problem with conferences like this, here is my rant… there is no stated purpose, why this is important or why I should attend or for that matter why should anyone attend this conference. I have a lot of respect for Academic work but they seem to miss the point in most things. I don’t even know if people understand what Open Access means and how it is related to what they do everyday… I did what any self respecting researcher should do… Googled it and of course my savior was Wikipedia

Open Access (OA) is the practice of providing unrestricted access via the Internet to peer-reviewed scholarly journal articles. OA is also increasingly being provided to theses, scholarly monographs and book chapters.[1]

Maybe its just me, should this not be the norm? why would you not publish your work right away and get feedback right away? I guess this is the Customer Development mentality that I think we need to bring into Academia, oh, well, we cannot change everything. I will try my best to participate and support the initiative.

Here is the schedule:

09:00 Coffee and registration
09:30 – 10:30 Keynote: Open Access in Europe: how is it progressing? – Alma Swan, SPARC Europe
10:30 – 10:50 Open access to scientific research data, Guðmundur Þórisson, University of Iceland
10:50 – 11:15 Coffee break
11:15 – 11:35 Iceland’s participation in OpenAIREplus – Sólveig Þorsteinsdóttir, National University Hospital
11:40 – 12:00 Open Access and the Research Funds at Rannís – Hallgrímur Jónasson, Rannís

12:00 – 13:00 Award Ceremony and Lunch

13:00 – 13:50 Lightning talks organized by Hakkavélin
14:00 – 15:00 Keynote: Before and After SOPA – Glyn Moody, freelance journalist
15:00 – 15:20 Accused of thievery by FTT – Dagþór S. Haraldsson
15:20 – 15:50 Coffee break (30 minutes)
15:50 – 16:10 The Full Potential of the Internet – Jonas Öberg
16:15 – 16:35 Ebooks and accessibility – Birkir Gunnarsson
16:40 – 17:00 Mining for freedom in the european institutions – Stefan Marsiske

March 27, 2012

Entrepreneurial Design – Revisited

I have written about the course being offered in the School of Design in NY with the title Entrepreneurial Design by Christina Cacioppo
Gary Chou of Union Square Ventures. I wanted to take the opportunity to bring attention to the material. I believe the structure, the reading material and all the links they have put together is incredibly relevant and useful. I keep getting back to looking at the syllabus and discovering new things that I never thought about. If you have not visited the site and checked out the material please do. Depending on the startup cycle you are in there is material there that is relevant and valid. I think particular section is valid for the Lean Startup Meetings that we have having with Hugmyndaráðuneytið. The coming week I am going to try something where we will record the discussion and share in SoundCloud for those who were not present. Here is the topic and I think I will go through the Giff’s Slides. Here is the link to the Event on Facebook

Customer Development and Running Experiments with Giff Constable

Week Two Slides

Giff’s Slides

Week Two Recap

Love letters

Readings

March 26, 2012

Native Monetization

Advertising advertising

Advertising advertising (Photo credit: Toban Black)

I dont get banner ads, let me be very honest with you I am Ad blind. If you really think you care going to get me to click on a banner, you are very wrong. I am not the only one thinking this way. We have become oblivious to all these flashy things shown on the websites. I wish we would have a cleaner web. I go to a website to do something, i.e read gossip, read news, watch a video or read about something my friend thought was cool, important whatever, I get sorely disappointed when I go to these site which have these ridiculous advertisements that really turn me off.

Fred Wilson, had a very interesting post about 6 months back here is that video. The video is 22 minutes long, so check it out when you have some time. The summary of the video is that the online advertising medium is fragmenting, You have Google Ads which is based on searched content, Social Ads that is based on emotional/social sharing content, Internet Video Ads, Mobile Ads, Location based Ads, Streaming Audio based Ads etc. Managing the advertisement budget is not that simple anymore. I specifically want to emphasize there is a difference between Marketing and Advertising. I don’t want to go into that discussion in this post. This post is about Advertisements.

I believe websites need to focus on Native Monetization, I think that is the way to ensure you don’t turn off your user base. What do I mean by Native Monetization? Look at the ads by Google, they don’t sell banners they specifically encourage their advertisers to do the work on deciding how, when, what and where the ads needs to show up. More specifically, what search words are linked to the ads, what geography etc this actually enhances the experience of the ads consumer. The same is true of many of the platforms, like promoted ads on Twitter, location specific ads on FourSquare, promoted ads on Tumblr etc I am not so sure that it has been implemented that correctly in Facebook and that is probably the reason they are not able to monetize ads effectively. I hear through the grapevine that Facebook is having challenges in converting advertisements. I may be wrong in this assertion. One more titbit of information that I got out of Jonah Peretti of BuzzFeed (video below) is that the Content Management System that renders your websites contents needs to be used for the ads that you display in your website. Actually just following that advice you will be forced to do Native Monetization.

March 25, 2012

EVE Fanfest 2012 – EVE Forever trailer

This was EPIC to say the least. It was my first EVE Fanfest, thank you Hilmar for inviting me. I got to see the true awesomeness that has been created by the CCP team. Congratulations! I was mesmerized, and it took me back a long time when I was fascinated by video games and how I spent endless hours playing games although I did not have access to the latest or the greatest, I got hooked. I have been resisting the temptation of getting back to playing games. I have to say EVE Online and Dust 514 look incredibly attractive. First of all, there were a couple of announcements that I think was incredible,

  1. DUST 514 will be the first AAA game to be totally free on Sony PS3 platform
  2. DUST 514 and EVE online are linked, what does this mean? this means CCP has really broken ground in integrating a first person shoot out game with a massively multi player strategy and battleship game. It has never been done before! In addition to that the level of details that has gone into developing the avatars, the space ships, the engine, the missile launch systems is just simply mind blowing. CCP has truly shown leadership and broken new ground in gaming.
  3. What was fascinating to me was how involved the gamers were in the entire show. CCP has shown incredible strength and maturity in allowing the players in the game dictate how the game should be run. To seal that strategy they have formed what is called as the Council of Stellar Management, which is a democratic way in which the players in the game get elected to represent all players. The CSM meets with the CCP leadership and the Game development teams to provide feedback and raise issues. This is truly innovative and I would like to say a small company called Clara which has been working with CCP for more than 18 months is helping CCP. Full disclosure, I am one of the investors in Clara, made me really proud looking at Jon Lander, the Product owner of EVE online show the word cloud generated from CLARA to describe how CCP takes Community interface seriously and how they engage with their players. It basically validated our business hypothesis that gamers and players of the game really are the true heroes in this new world. The gamers define the agenda and develop the eco-system.
March 25, 2012

When Harry met Sally…


I saw this clip in Reuters Tech Tonic TV, it was so simple yet profound. It described the relationship between a VC and the Entrepreneur. I want to ask the question, how is your relationship with your Investor? Would you be proud to have a video done this way with your Investor? I strive very hard to build respectable relationships with everyone I meet so one day in the future our paths may cross and you would look at me and say, hey I know you, my previous experience with you was a good memory and I would love to see if we can do some business together.

When Harry Met Sally...

That never happens if I don’t follow some principles:

  1. Win-Win or No deal – The concept of a win-win deal is quite simple, I try very hard to listen and understand what a win is for the person who is sitting in front of me. If I let you win without putting my interest up front, when the time comes my hope is you will do the same. Actually, if I make my Win your Win then it is hard for you to not let me win. This concept is so counter intuitive to so many people, my sincere hope is everyone realizes the incredible opportunity in front of us everyday. I think we all need to work on it. I am by no means suggesting that I am great at this, but I try very hard not to let my interest get in the way of the problem at hand, it is a constant battle and a penance in personal growth and sacrifice. It is assumed that both parties need to think Win-Win, but that is not true, only one party needs to think Win-Win… you see No Deal is a perfectly acceptable alternative.
  2. Believe in Karma – What is Karma? well, it is the belief that everyone even children know what is Right and what is Wrong. If one gives oneself to the truth, ie. look at yourself in the mirror everyday and say I lived this day truthfully and I did my duty (karma) to the best of my abilities without any expectation on the return, the Universe usually rewards you with a lot more than what you would have originally asked for. It is the belief that serving without any expectation of return results in far greater returns for the ones serving and to the entire universe. It is a hard pill to swallow, because we are always thinking about whats in it for me? well, I gave that up long time back. I just want to serve and help anyone who cross my path, the rest is usually taken care off. For those of you readers who don’t know I am the President of the Reykjavik Rotary Club, the only English speaking Rotary Club in Iceland. I joined the Rotary for two reasons:
    1. Rotary’s Service Motto: Service Above Self
    2. Rotary’s 4 way test: of the things we think, say or do
    • Is it the TRUTH?
    • Is it FAIR to all involved?
    • Will it bring GOODWILL and BETTER FRIENDSHIP?
    • Will it be BENEFICIAL to all concerned?
  3. Balance the 4 elements of self, Body, Mind, Heart and Spirit. There are many books written about this and I really should dedicate a whole blog post to write about this.

I really did not start to write this post to write about philosophy but in the last analysis everything is about Relationships with people. I don’t care if you are the President of the largest nation in the World or a peasant working in the fields of a remote country, those who rise above and serve humanity are those who realize their purpose in life is to serve their fellow human being.

I sought my God and my God I could not find. I sought my soul and my soul eluded me. I sought my brother to serve him in his need, and I found all three—my God, my soul, and thee.

~ Anonymous

Here is the original trailer of When Harry met Sally, a classic

March 24, 2012

Business Model vs. Business Plan

There is a fundamental difference between a business model and business plan. A Business Model defines how you will make your product or service economically viable. A business plan describe how you are going to make your business model work. One does not always know how the plan is going to evolve, so building detailed plans although a great thought or intellectual exercise adds no real value because you are wasting time making assumption about the world out there and hope that your strategies or “plans” will address those assumptions and hypothesis. The truth could not be far from it. Most people confuse this with the product development road map and the classic example I get is people saying “hey, Steve Jobs did not go and interview his customers before he created the iPod, iPad, the Mac Air or any of the products that has come out of Apple…” to that I have only one answer, unfortunately there was only one Steve Jobs and how do we know that Steve did not do that? he had a keen eye for design and detail, he spend considerable amount of time in Silicon Valley being part of the information

revolution and he had many fails to learn from. I try to remind those I am talking to that they need to spend 30 years in Silicon Valley, formed 2 or 3 multi-billion dollar companies, have the same network and experience of Steve Jobs before being able to compare themselves to what Steve Jobs did.

There is a simpler way, Steve Blank, has written books, taught classesand has done many things to showcase the Customer Development Methodology, which is nothing but a Business Model. If you approach problems with the Customer Development method, you can build a pretty good hypothesis and once you have an hypothesis, it can be validated and based on the results you can build a business. The trick is to get through that cycle as fast as you can and then execute based on the learning. It is never simple and straight forward you have change your hypothesis several times and build and re-build your business model that is why it is a startup.

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