I have been having so much fun watching Nicholas Nassim Taleb talk about Antifragility.
Source: Wikipedia, Hitrecord.org
Did I mention that I am big fan of his work? It is just brilliant the way he has simplified complex systems. I really like his perspective on Entrepreneurs and those who risk it all and have their skin in the game. His argument which makes a lot of sense to me is that having a lot of entrepreneurs tinkering with things is what creates science and not the other way around. The problem is that those who are practitioners don’t always write their habits and rituals and why they are able to improve on their experiments so that knowledge gets lost. This is changing in the Entrepreneurial community world wide because of the explosion of the work of Brad Feld, Fred Wilson, Mark Andersen, Ben Horowitz, Eric Ries, Steve Blank and many others fallen heros who have taken the audacity to show everyone how to fail, learn from the failure and increase our odds of success as a global entrepreneurial community. The reason we listen to the above list and to Taleb is because they have fallen, lifted themselves up and succeeded, would our learning be improved if all those who fail also shared their experiences and learnings? I think it would hence the title of the blog post… I would encourage everyone to create a blog and start writing about your fears, successes and failure, you never know what titbit of information you provide can help someone else in the global community. We are able to link information together and access it from different devices and from almost anywhere in the world, if we are able to create a collective conscious of entrepreneurs and tinkerers, it would be awesome to listen to this heartbeat… just stop and think about it. This is profound stuff if only you notice it.
Taleb talks about Convexity and how that skews every assumption we have about economic models and econometrics… I am sorry Dr.Carter Hill (my econometrics professor in Louisiana State University), I think the Central Limit Theorem does not work neither does the Bell Curve. Taleb has proved many times over and the stock market is proving everyday that none of these theories and empirical work is relevant in the real world.
Coming back to the notion of why we need entrepreneurs and small is beautiful, a couple of the themes in Talebs work. Both of these things are attributes of Iceland. Watch the video above, it is 1 hour long but it sooo worth it.
Logo Open Source Initiative (Photo credit: Wikipedia)
Steve Blank has been one of the bloggers, Entrepreneurs and Gurus who has been writing about and teaching entrepreneurship in Stanford and a number of universities all over the world. He has compiled a blog post that has all the resources that any entrepreneur can use in this blog post with the Title “Open Source Entrepreneurship“. I am a big fan and I hope we all can use the wisdom and knowledge that has been aggregated in this blog post.
via Open Source Entrepreneurship.
I am a big fan of the Kaufmann Sketch series and this is the latest one about building Startup Ecosystems. For those of you who have been reading my blog for more than a year now know that I am committed to building a sustainable and resilient startup ecosystem in Iceland. The above video says it all, Brad Feld has documented it in his book Startup Communities, as he says it is not going to happen in the next year or the year after or the year after that. It is going to take time. I wanted to bring attention to another video by Steve Blank, on the Secret of Silicon Valley… it actually describes what really created Silicon Valley. I am not for once trying to suggest that we need to follow that path, but every crisis is an opportunity and I want to really take this opportunity and create something that is tangible that we can look back to and teach out future generations about Creativity and Mastery, not consumption and destruction. I believe Iceland has a fantastic opportunity to make it right, do things right and invest in the right things. However, it is not going to happen if we loose sight of the road map as described in the above video. Here is the Secret History of Silicon Valley:
Image via CrunchBase
I had a very interesting discussion during the UnConference Event, where one of the participants was telling me how she feared how the community would react if her business failed and that prevented her from taking actions that were not in her comfort zone. This is a huge problem in Iceland. I get the feeling that people think that failure is a bad thing. I embrace failure and I am fearless about my business ventures. There is no other way to look at the abyss of Entrepreneurship. I remember Steve Jobs seminal talk in Stanford and I wrote about it many times.
It is impossible to connect the dots looking forward, it was very very clear looking backward 10 years later. Again, you cannot connect the dots looking forward you can only connect them looking back. You have to trust the dots will somehow connect in the future, you have to trust in something, your gut, destiny, life, karma, whatever… because believing that the dots will connect down the road, will give you the confidence to follow your heart, even when it leads off the well worn path and that would make all the difference.
Almost everyone looks at Silicon Valley as this role model of building a startup ecosystem, and I wonder if Silicon Valley would have become such an ecosystem without the leadership of Research oriented organizations and companies that embraced failure as a way to learn to improve on their experiments. Mark Suster had a post about this where he was interviewing Steve Blank and their discussion is extremely illustrative of the nature of Silicon Valley. I believe a Culture that embraces failure and has the buffer to support those who dare to challenge the norm and improve the community need to be embraced. I also believe those who take chances on those type of individuals need to be embraced because without capital the challenges of experimentation is made doubly hard. Here is the video interview of Mark:
I always enjoy Steve Blank‘s blog, this one is a classic… I think, because he is talking about his personal experience of being in a War. I think we over emphasize the magnitude of the challenges we face while being an Entrepreneur, I think this blog post is a good reminder that there are things much bigger, more important or with much dire consequences than being an Entrepreneur. So the next time you are facing a really tough time reach out to this post and read the last few paragraphs.
Image Source: Steve Blank Blog via centurywings.com
Captain Jeremiah Costello and his A-7D was the last attack aircraft shot down in the Vietnam War.
Less then ninety days later the air war over Southeast Asia ended.
For the rest of my career when things got tough in a startup (being yelled at, working until I dropped, running out of money, being on both ends of stupid decisions, pushing people to their limits, etc.), I would vividly remember seeing that empty spot on the flightline. It put everything in perspective.
Entrepreneurship is hard but you can’t die.
via Entrepreneurship is hard but you can’t die.
I have started re-reading a bunch of books. Here is the list:
- Crossing the Chasm – Marketing and Selling Disruptive Products to Mainstream Customers by Geoffrey A. Moore
- The Innovator’s Dilemma – by Clayton M. Christensen
- The Startup of You - by Reid Hoffman, Ben Casnocha
- Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder, Yves Pigneur
- The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company by Steve Blank, Bob Dorf
It is very easy to get sucked into the minutia of activities and tasks and forget the overall game plan. The motivation to read these books came when I started feeling a little lazy and did not want to write a blog post. It is really hard to keep up the discipline of writing. I try to write what I am thinking most of the time. My current role as CEO of GreenQloud is focused a lot on building a great team culture, stabilize our product offering, win in the market and also change the debate on Cloud Computing. I am going through all the challenges that I have been writing about. The motivation to keep going comes from the love to win. I know we will win, the question is how and when. I have spent quite a bit of time understanding the architecture and value proposition of GreenQloud, the technology stack Hardware, Networking, Software and API services that the team has assembled in our offering is amazing. We have a very talented team that is solving a really hard problem. In addition to that I believe using renewable energy in one of the fastest growing industry is not just a nice thing to have but a must have. I have written about Geometric Progression and the challenge that trend brings. The above books give me a lot of strategies and ideas that can help tell the story of something that I am very passionate about. Are you using the collective knowledge that exists in these books? if not you should because we usually waste a lot of time trying to re-invent the wheel… and my belief is that the most valuable resource we have is time and squandering it because we want to do something our own way is pure vanity. What strategies are you using to win in the marketplace?
Image Source and Links:
If you asking this question, my answer is another question… Why not? Why cannot we build world class companies out of Iceland? There are examples like Ossur, CCP Games. The cynic always says we need more examples and more track record, Iceland is small, we don’t know how etc etc I don’t agree! and I don’t agree that it should take 18 years or 20 years to build world class companies. The reason we have not seen more world class companies come out Iceland is because no-one is asking, investing and mentoring companies to be world class players. When I speak to people who are investing in compnaies they always say it takes a long time and it takes a lot of money, those may be true but it would be even more true and will not happen if we are not aligning the ecosystem to build these kinds of companies. The Ecosystem needs a few ingredients, I have written about it before. While we are building the Ecosystem for Entrepreneurs and Startups in Iceland it is also importan to understand the transition an Idea goes through before it is made into a company. There is no short cut to this process, understanding the process helps you accelerate it when you see the right indicators. Here is a video of Steve explaining Passion and Purpose and Teams.
There are specific stages in the development of a company. Steve Blank has a fantastic post explaining the transition from an Idea to a Startup to a Company. I have written a lot about the inflection point we are in, basically in terms of technology being the great enabler for Entrepreneurs. I think the biggest challenges many of the stakeholders face while looking at startups or ideas is that they evaluate the team as though it is a smaller version of a big company which is very far from the truth. Startups are NOT smaller versions of Big Companies. They need to be organized differently, their focus is different and their metrics are different. I don’t understand how one can be an investor in Startups and not know this difference. Startups are searching for a repeatable business model, they may change it many times along the way, more popularly called a pivot.
The team that can do this cannot be from a traditional organization because team members who are from traditional organizations are measured on efficiency of execution not on efficiency of search. Steve’s article very clearly lays this out Search vs Execution. Obviously, startups need to execute but on totally different goals and milestones than if they have found the repeatable business model. The biggest risk startups have is in finding the Product to Market fit or Repeatable Business Model, call it what you may. The method that is employed to address this risk comes in different flavors The Lean Startup is the new fashion, Steve created the Customer Development Methodology. All fancy words to basically define something very simple, are you creating something of value and is there someone who has a need to use that value and is willing to pay you for it. If you are able to answer that question then you have the first part of the question answered now how can you make this transaction repeatable? once you have answered that question then you move on to the next thing how efficiently can we execute that. The team that does the last task is what we all know from traditional businesses, the skillset, the mindset, training and development, team dynamics everything has to be different. Fred Wilson has written a lot about the Management teams in his MBA Mondays Section, look at Table of Contents links
- Scaling The Management Team
- The Management Team – While Building Product
- The Management Team – While Building Usage
- The Management Team – While Building The Business
- The Management Team – Guest Post From Matt Blumberg
- The Management Team – Guest Post From JLM
The above resources are valuable in building your team dynamics. I keep emphasizing the team because I fundamentally believe we invest in People, it is not the Idea, it is not the economy, it is not the currency that drives progress, people do. So why are we not spending more time developing the team?
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.
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
Week Two Recap
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.