Founders Dilemma – A Book Review

TheFoundersDilemmas_I have been listening to “Founder’s Dilemma – Anticipating and Avoiding the Pitfalls That Can Sink a Startup” by Noam Wasserman. I am 2/3rd done… it is very factual with examples and recommendations from startup founders going through a couple of case studies, more specifically the story of Ev Williams the founder of Blogger, Odeo and Twitter. It also has quotes and experiences from Dick Costelo, the current CEO of Twitter and serial entrepreneur. The book is written based on a data set the author created by running surveys on startup founders. The book’s narrative is sobering if anything, tells you how founders basically fall into a number of pitfalls despite the best of intentions. What was the saying again? The road to hell was paved with a lot of good intentions.

The author more or less documents categorically all the pitfalls, like founder’s background, the stage in their life when they found the company, what kind of co-founder relationships work and how that influences the equity split and how that is so detrimental to the success of the relationship or the startup. The main contention point in a startup always comes due to the two headed hydra, Economics vs Control. Who gets to run the company and what is the monetary compensation split between the original founding team. The data is sobering, friends do crazy things when money is involved. It even gets crazier when the Ego of the founding team is considered, who gets to be CEO and why that matters etc. I recommend the book, just to make sure every founder understands the pitfalls of splitting equity early in the game and how that dictates where the startup goes.

The following is the description of the book in Amazon:

Often downplayed in the excitement of starting up a new business venture is one of the most important decisions entrepreneurs will face: should they go it alone, or bring in cofounders, hires, and investors to help build the business? More than just financial rewards are at stake. Friendships and relationships can suffer. Bad decisions at the inception of a promising venture lay the foundations for its eventual ruin. The Founder’s Dilemmasis the first book to examine the early decisions by entrepreneurs that can make or break a startup and its team.

Drawing on a decade of research, Noam Wasserman reveals the common pitfalls founders face and how to avoid them. He looks at whether it is a good idea to cofound with friends or relatives, how and when to split the equity within the founding team, and how to recognize when a successful founder-CEO should exit or be fired. Wasserman explains how to anticipate, avoid, or recover from disastrous mistakes that can splinter a founding team, strip founders of control, and leave founders without a financial payoff for their hard work and innovative ideas. He highlights the need at each step to strike a careful balance between controlling the startup and attracting the best resources to grow it, and demonstrates why the easy short-term choice is often the most perilous in the long term.

The Founder’s Dilemmas draws on the inside stories of founders like Evan Williams of Twitter and Tim Westergren of Pandora, while mining quantitative data on almost ten thousand founders.

People problems are the leading cause of failure in startups. This book offers solutions.

It is not surprising to see that People problems are the leading causes of failure in startups. The solutions offered in the book so far are not earth shattering but could possibly work. One thing that I thought was interesting was the fact that people who have worked together in a professional setting tend to be much better founders than friends or family or strangers. Another lesson is to make sure there is a good open discussion about how the equity is split upfront and who gets to lead the team. In most cases a simple handshake and quick decision is not the solution, the author recommends a more ponderous road and says it increases the odds of the startup founding team sticking together and resolving challenges as a team.

Bottom line, I recommend the book. It is not inspiring but factual, data driven and to a certain extent impersonal although the author uses the case study of people, it felt cold to me. Maybe one needs to be cold when dealing with starting a company completely opposite to what you hear in the mainstream media, passion, camaraderie and everything is fine stories.

Inspiration is Perishable

I meet people. I enjoy meeting people, learning about them, their background and why do they do what they are doing. I am student of body language, language, attitudes, bias and perceptions of everyone I meet. I learn a lot about myself when I become a student of other people’s behavior. I try very hard to be empathetic, helpful, inspirational and positive in my conversations. I always greet people with a big smile, ask them how they are doing and when they reciprocate I always respond back saying I am always doing great. Another classic question I often get is how is life? I always respond saying that Life is Wonderful/Great. Sometime those I meet get disappointed that I don’t tell them what they want to hear. My tagline is that I am an investor, so I should just solve everyone’s problem by investing money on them. My first response is always, lack of money is never the problem. Everyone wants a quick fix, if only this Bala guy invests in me my problem will go away. Really? Are you that entitled? why do you believe it should be that easy? is it that simple? believe me raising money is hard. If you have been reading my blog for sometime you know that I have written a lot about it, I struggle with it everyday. I raise money all the time, I invest all the time but expecting anyone to invest in your idea is just so Silicon Valley-ish, even there you need to show something before anyone throws money at you.

When I meet “Wantapreneurs” – my definition of people who want to build a business but have made no effort to take the first step – they think that I should just invest in them because I agreed to meet with them. I really wish we could move past raising money part, focus on building a business, focus on getting your idea to reality, focus on helping your customers, focus on scratching your own itch etc. If you are not willing to invest in making something with all the tools and technologies that are out there already, why do you believe money is going to make any difference. I try to help every entrepreneur and startup founder I meet, it is in my nature to help. I believe very strongly in the “Give” and “Service above Self” philosophies. I really get disappointed when I get feedback that our meeting did not uplift the “Wantapreneur”‘s spirits. Is that my responsibility? to uplift your spirit? Really? Staying positive and doing things to make progress towards your goal is your responsibility, yes a lot of people can help you along the way. There was a great post by Dave McClure about this title “Engineering Minimum Viable Inspiration“, with a classic Dave’s twist aka: do you give a Shit + can you get others to give a Shit.

Inspiration is perishable, it only gets you to get a little motivated the rest is hard work, dedication and focus. I have written a lot about Focus and Perception. All the tools, mentoring, advice, strategies, tactics etc are only sounds bites, it is the responsibility of the entrepreneur to launch, sell and build a business. Raising money makes things difficult, I have written about this before I have seen too many entrepreneurs and startup founders prematurely raise money from the wrong sources and then regret the rest of the time why they did that. Believe me I wish there was an easy answer but it is not easy. My advice is always delay raising money as much as possible, hustle, bootstrap and do what it takes. It is your dream, now go make it real!

What Startups Can Learn from Iceland’s Strong Brand Identity

Strategic planning and branding are integral to establishing a company’s identity and reputation in the marketplace it is targeting. Startups often neglect this extremely important area, focusing instead on more immediate needs such as getting their idea off the ground and securing enough funding to afford staff, gear and materials—completely valid.

Experienced entrepreneurs will tell you, however, that establishing a brand identity early can help create significant opportunities for a startup, from seed and growth funding to customer acquisition and retention to positioning for a future merger or acquisition.

noah and mel_2Noah Ross and Mel Weinberger specialize in helping startups that are looking to establish a brand identity and major brands in transition looking for a refresh.

“Iceland is the perfect venue to talk about branding because it’s a country with such a strong brand and a strong sense of identity,” said Noah, who is a Partner and Executive Creative Director at Launchpad Advertising, which was recently acknowledged as one of INC. magazine’s fastest growing companies.

While it is true Iceland’s identity is very clear, the startup community in Iceland often laments the struggles with establishing their brand voice and launching brand and marketing initiatives, particularly when attempting to reach foreign markets. However, the Startup community is rich with local experts and marketing entrepreneurs like Thoranna Jonsdottir and Runa Magnusdotir who are making marketing consulting accessible to startups on both a small business and personal/executive brand level. Startups and entrepreneurs within Iceland can lean on these local resources to help determine their core message, identify their target customers and create an emotional connection to the startup’s product and service.

“Iceland, by and large, is a very unique, very special place,” Noah said. “At the end of the day, people are going to relate from what they feel, and for me, I’ve traveled to a lot of places where you feel different things, but few that inspire with the strong sense of pride and fierce independence of Iceland – a country that produces music, literature, fashion, and even landscapes like no other place on earth. Also, the puffin is delicious,” he added.

It’s this same confluence of creativity, independence, resourcefulness and exceptional ideas that can propel Icelandic startups and entrepreneurs to success as we’ve seen in recent months with Plain Vanilla, CLARA, FAFU, Mobilitus and others.

“The reality is that every startup is fragile. Having a community of likeminded peers who support you makes you/ it stronger,” said Mel. “That driving force and individual expertise, when pulled together across teams, is unstoppable. It might be as tangible as getting coffee and guidance once a month, or going to a perspective-changing conference, but it’s also the intangible thread those events that leave behind that is so necessary–and that’s the most enriching, invisible part. I think Startup Iceland is helping to create a rallying point and backboard for the community that is invaluable,” said Mel.

Mel, who is active in the startup scenes of Austin, Texas and New York City knows brand both from the agency and entrepreneur perspective, as the founder and CEO of Fit Steady, a startup in the health and fitness sector whose tagline is “Finally, an easier way to get fit” and who won first place during Startup Weekend Austin in 2012.

“[Fit Steady] started from a passion for fitness that led me to become a personal trainer,” said Mel. “From that vantage point, I became a sounding board for my friends about all of their insecurities and how challenging it was for them to find the right path. How many times have you walked into a gym only to stare in longing confusion at all the machines and hop on the treadmill again? How many different diets have you tried? Why is it so hard to navigate our personal paths to health & fitness? So I set out to make it easier. I’m trying to make things better by making personal fitness more accessible to the average person.”

Mel reinforces the easy fitness message throughout the Fit Steady brand experience, from searching for a coach to incorporating easy-to-implement fitness tips in the company blog. The company’s mission and passion is very clear.

Noah and Mel will make a joint presentation centered around brand identity with the Startup Iceland audience on June 4th  at Harpa and will participate in Unconference  as well as hold “Office Hours” at Háskólinn Reykjavík on June 3.

 

 

 

Rework – Book Reveiw

Cover of "Rework"

Cover of Rework

I finished listening to ReWork, the book written by Jason Fried and David Heinemeier Hansson the founders of 37Signals. A software company. I think the no-bullshit prose and their approach is refreshing. No wonder the book has been on the New York Times bestseller list and the authors and the company have gained much respect. I think a lot of what they say in the book is common sense, however common sense is never common practise. I see the book in a number of company shelfs and I ask myself are they following what they read in that book? Is it difficult to follow? I have recommended many books, strategies and philosophies related to building startups and being entrepreneurial, these are learnings and teachings that I want to live by and follow myself. You know the saying if you want to learn something, you should teach it and that is the best way to learn. I love the teaching part of what I do, that is where the learning happens for me. Most of the time it is me asking questions, about why an entrepreneur thinks and does things a certain way. I learn a great deal. I try to read as many books and blogs as I can to see if there are learnings that I can apply and share everyday. I think this book made that real for me. The author recommend teaching as a way to be genuine and authentic, because you cannot posture when you are doing that. In addition, having a higher purpose and having a really long term goal of building sustainable businesses is a hard job, the authors force the reader to think that way, I think that is powerful. I highly recommend the book if you have not read it or listened to it. I know I will listen to it again. There are so many strategies and ideas that I consistently share with every entrepreneur and startup founder I meet, especially about Marketing and building an audience. Here is a classic summary of the book:

  • ASAP is poison
  • Under-do the competition
  • Meetings are toxic
  • Fire the workaholics
  • Emulate drug dealers
  • Pick a fight
  • Planning is guessing
  • Inspiration is perishable

Get the book you will not regret it.

Getting Lucky – It is not random, it is a skill

Fred Wilson had a great post with the title “Get Lucky”. I could not resist writing about it. Startup Iceland 2014 speaker Liad Agmon gave a great talk about how he got lucky and this post reminded me of that talk. I meet a lot of people as part of what I do and I continuously try to learn by watching how people create their own luck. People like Fred and Brad, who are open, transparent and willing to share their thoughts and ideas, give before they get or just give their time etc are the people who consistently get lucky with things. I consider myself to be extremely lucky as well, I live in an awesome country, have a wonderful wife and daughter, I love what I do and really motivates me to do more everyday. I find it interesting when I meet someone and they complain about being in a dead-end job or they are not doing what they are passionate about etc I just ask myself why don’t you stop doing what you are not passionate about and find something else to do? I know the typical answer, well my dead-end job pays the bills and I cannot afford to quit…

Fred refers to a research by psychologist Richard Wiseman did on people who consider themselves lucky or unlucky, there are many references that are applicable. Getting lucky is not a random event, according to the author, getting lucky (and unlucky) is a function of state of mind (positive vs negative), being open minded, and trusting your gut. These are things that everyone of us can choose to do. Being positive again is a choice, same for being open minded and trusting your gut. I wonder why is it difficult to follow through on these?

Founder Institute – Reykjavik Chapter

fi_logo_leaf_transparentThis fall we are kicking into high gear with Startup Iceland initiatives, I applied to lead the local chapter of Founder Institute in Reykjavik and I got accepted. I had to take a test, the same test that every wanna-be-entrepreneur takes when she/he applies to a Founder Institute program. I am looking for Co-Directors for this initiative. I have reached out to some of you to help me but I would like to open it up and see if there is more interest to help me get this started. Founder Institute is an idea-stage accelerator from Silicon Valley. A local chapter will build new technology companies, and these companies go on to enter other incubators, raise angel capital and create jobs. For those who are interested, it is a part-time opportunity that is requires one night per week, and you receive equity in all of the companies created.

Here is a description of Founder Institute in their own words:

The Founder Institute is the world’s largest entrepreneur training and startup launch program, helping aspiring founders across the globe build enduring technology companies. In the Founder Institute’s four-month, part-time program, promising startup entrepreneurs “learn by doing” and launch a company through structured training courses, practical business-building assignments, and expert feedback from a large network of business mentors. Plus, aspiring founders are not required to quit their day job to participate, so they can begin building a business around their ideas without putting their livelihood at risk.

Based in Silicon Valley and with chapters across 66 cities and 40 countries, the Founder Institute has helped launch over 1,230 companies, which have created over 10,000 new jobs. The company’s mission is to “Globalize Silicon Valley” and build sustainable startup ecosystems that will create one million new jobs worldwide.

The Founder Institute was founded in 2009 by serial entrepreneur Adeo Ressi. It is operated out of a small office in Mountain View, California.

I really like the philosophy of Founder Institute, it also aligns with my vision of building great companies out of Iceland. We have all the ingredients here and the Silicon Valley mind-set. Here is a gist of the Vision, Formula and Approach of Founder Institute.

Our Vision

Starting a company is an arduous and lonely journey, and technology entrepreneurship is a constantly evolving discipline. The Founder Institute aims to improve the rate of startup success by creating local startup ecosystems that emulate the unique characteristics of Silicon Valley.

Our Formula

Great People + Expert Training + Collaboration = Exponentially Better Chance of Success

Great Companies Start With Great People

It’s very hard to judge a new founder by the quality of their idea, because there is too much subjectivity involved. To apply to the Founder Institute, you do not need to provide an idea. Instead, we use a proprietary Predictive Admissions Test to find the most talented people.

To date, over 20,000 people have applied, and the Founder Institute can predict with 85% accuracy somebody’s potential to become a successful technology entrepreneur. Our revolutionary entrepreneur research has been featured in The New York Times, CNN, and Forbes.

Structured Training

The best way to learn is by doing. Through a structured, 4-month curriculum of weekly training courses and business-building assignments, you graduate the Founder Institute as the Founder of an enduring company.

The curriculum was built using Silicon Valley best practices, and each training course is led by members of the Founder Institute’s worldwide network of over 3,100 entrepreneur Mentors, that are founders themselves.

So, if you have read this far and interested send me a note.

Permission less Innovation

prime-air_high-resolution02It is painful to watch the obvious play out in the US. I don’t know if you have been seeing what is happening with legislation and regulations around all the innovations that Entrepreneurs and Startups have been doing and how the incumbents have been coming up with resistance through lobbying and permission raj. The latest is the FAA ban on drone technology to deliver packages. No-one knows if this thing is going to work but before that we need to go and get permission to experiment? Makes no sense to me… There a numerous accounts of this happening in the Hospitality sector vs Airbnb, Taxi services vs Uber, Privacy concerns, Net Neutrality and so on and so forth. I think as these debates play themselves out what is an entrepreneur to do? wait for the legislation to give them permission to innovate? I really do believe the machines have taken over, we just need to figure out a way to make this as easy as possible. I believe tremendous value can be created if one can innovate in a place where there is no need to get permission to innovate, say a place like Iceland, of course we have a legal system and regulatory bodies but I think value creating legal things can be built here and tested without causing any challenges to the livelihood of people or displacing a large population as it could do in some of the larger industries in the larger markets. Actually, innovation is needed in a small place like Iceland because there are not a lot of people here. Icelanders have innovated on many fronts, namely Energy, Education, Fishing and Home heating and Broadband (did I mention I get lightning fast broadband in my home through Fiber Optic Cables, and that is standard).

The biggest value is going to be in the field of Software that creates value on top of Networks. I think that makes a lot of sense in Iceland and I have enough case studies to prove that this works. I am not stopping with my arguments, I am putting my money where my mouth is. I am investing in all of these things in Iceland. So if you are scared about the legal ramifications of starting a business in Iceland with innovation as your core, just talk to me. We need to embrace change as change is coming… there is nothing we can do about it other than get ready and prepare and be well equipped to manage ourselves in the change.

Intrapreneurship in Iceland – the story of Tempo

I believe startup thinking or entrepreneurial mindset is not limited to startups and entrepreneurs. I think anyone in any job can put on the hat of an entrepreneur and try to change their job, their career or even their big corporation. It is difficult but the challenges are no different than when one starts a new company or embarks on an entrepreneurial journey. Today we have a guest blog by Jessie VanderVeen, the Marketing Manager of TM Software a company that was born out of the financial crisis in 2008 within a large established IT company in Iceland. I think the story is inspiring and everyone who is part of a large organization can take note and innovate their customer service, product development or how you do your day to day activities. Here is the story of Intrapreneurship in Iceland:

By Jessica VanderVeen, Marketing Manager at Tempo

Tempo’s story is one of resourcefulness, resilience, and a bona fide need for adaptability and change during a time when Iceland’s economic environment demanded these very things. Our existence came to be out of a need to build agile solutions for real problems faced by real users — our own at TM Software.

TEMPO timelineBack in 2006, TM Software (a software development company headquartered in Reykjavík) implemented Atlassian’s popular project and issue-tracking platform, JIRA, throughout our organization. The developers on our custom web solutions teams loved JIRA, but were using an external platform to plan and track their time spent for client billing purposes, as well as for internal payroll. As a company that embraces Agile methodologies, this created a lot of hassle, headaches, wasted time, and even the possibility for inaccuracies. We needed an agile time tracking and planning solution that was so tightly integrated with JIRA, it felt like a part of the platform. We also wanted to measure how we used our time and whether we might improve our efficiency or better allocate our resources, and we needed reliable data to help us with those endeavors.

Initially, a handful of developers at TM Software was assigned to build the agile time tracking and resource planning plugin — now known as our Tempo Timesheets add-on — we so badly needed, and launched it for internal purposes. We ended up liking the solution we built so much, realized that there simply wasn’t a comparable solution available on the market, and launched it externally one year later with notable success.TEMPO facts

For several years, TM Software focused solely on building custom web solutions for customers, so the decision to launch into product development was a significant one — a leap that ended up benefitting us more than we initially anticipated.

We were able to accomplish this transition by bootstrapping: staying lean, making strategic decisions, and expanding only as our needs and resources evolved.

Continue reading

Video

Liad Agmon on how to get lucky – Startup Iceland 2014

This was one of the funniest talks in the history of Startup Iceland. Liad has a flare for delivery and timing. I am pretty sure he would have been a great stand-up comedian. He used to write jokes for scripts while he was in school. Of course there is a fantastic lesson in the talk about how to get lucky… no, no I mean with being an Entrepreneur and how to get your business up and going. Hint, persistence and having an open mind is the key. Listen to the talk, you will see what I mean.

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Startup Iceland 2014 – Done!

Ben at Startup Iceland

coverage in Channel 2 News in Iceland

Wow! what a ride, it was so much fun to hear all the great talks, meet so many young, upcoming and established entrepreneurs in Iceland participate in Startup Iceland. Startup Iceland this year engaged the whole stack of the community, we had people from the Government, Financial Institutions, Universities, Students, Entrepreneurs, Service Providers and people who were just curious to see what this is about. The mentoring sessions was also very well attended, although I screwed up and did not do a good job of preparing for the mentoring session. Oh, well, we learn and try to do better next time. I was impressed by the participation, networking and discussions that was going on during the coffee and lunch breaks. I am happy to say we packed the house and I believe everyone learned something new, got a new connection and built a bridge to cross some of the chasms one faces in this entrepreneurial journey.

John Biggs interviewing Jenny and Bre about MakerBot

John Biggs interviewing Jenny and Bre about MakerBot

I am so thankful for all the Speakers, Mentors, Sponsors, Harpa Concert Hall and Conference Center facilities and project team there, Reykjavik University leadership team and project managers there and all the volunteers who put their heart and mind into making this event come alive. I am truly blessed to get a chance to work with you all. I know my wife is going to kill me, I cannot wait to organize Startup Iceland again next year. I committed 10 years to building a sustainable startup ecosystem in Iceland and we are 4 years in and 6 more to go. I know with the momentum that we have gathered in the last years, we will continue full speed ahead… As Bre and Jenny from MakerBot continually reinforced to us with their MakerBot Way during the event.

I have to admit that this event is great personal learning experience for me and I learn so much from all these awesome speakers, leaders and influencers who come here and share freely their wisdom. What a way to learn. I am incredibly motivated to start working on a roster of speakers for next year. We will continue to get all the video content ready and start sharing the same through startupiceland.com, I will definitely blog about it so watch this blog post, or do me a favor and just subscribe to it that way you can get it in your promotions tab of gmail.

Lots of exciting ideas and suggestions came up during the event. I will be blogging about that as well so watch this space.

 

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