Entrepreneur 2 be

Founders At Work
interviews by
Jessica Livingston

ISBN-13: 978-1590597149

Lately, while reading, I’ve been underlining sentences and passages that are worth thinking about, sharing, or just rereading. I mark their position in a book by stickers. I don’t have to tell you how many things you can learn in this book - my copy has 53 tabs and looks like that:

Here is my read of it. In a To(Not)-Do list. Remixed.

Luck

• Get lucky. I am not kidding. One of the things I kept noticing is how everybody got lucky at some point, “we lucked out we found a great CEO”, or “that deal was total luck, came out of nowhere” etc. After all, if 1/10 startups succeed, if you do ten there is no way not to get lucky, is there? (statistically significant)
• There seems no luck, so don’t wait for it. It looks like a lot of the pivotal things happen on their own, but in reality it’s the result of your actions that you couldn’t predict. A lot of the founders seem to have ’caused’ good luck on themselves.

Qualities

• Do not give up. Jessica Livingston starts off with this point in the introduction, “In fact, I’d say determination is the single most important quality in a startup founder….Perseverance is important because, in a startup, nothing goes according to plan.” Unless you are lacking motivation, you should keep that on a sticky note on your screen.
• Think unusual ideas and don’t be afraid. Here’s what Buchheit (creator of Gmail) said about the googles, “…they are very open to crazy ideas - more so than almost anyone I’ve ever met.”

Marketing

• Make your product so good so it can market itself, I wrote about it. Here is Blake Ross on it, “It turns out that marketing is just making the product good enough that people spread it on their own, and giving them ways to do that. It’s a lot easier and more natural than I thought it would be.” In that category falls the story with choosing the right market. Marc Andreessen also said it in this post.
• Hire a good PR firm. The more I think about it, write business plans, and make projections it seems that direct advertising is just not the way to go. Word of mouth with PR help can do the trick. Paul Graham Says PR worked for them.
• Do not write business plans as a guidance of what you should be doing. It seems to be more of a marketing tool, “You can easily add a couple of zeros everywhere and sell the same thing to people. Instead of 10 percent market growth you make 20 percent market growth, and you suddenly make $200 million more in the fifth year, but so what?”

Hiring

• Hire the best people you can find (even if more expensive), “I still think it’s more efficient …. if you have two really good people and a very powerful tool. That’s still better than having 20 mediocre people and inefficient tools.”
  
• Hire someone with passion/desire. From my own experience too - even if people are not good at something, when they want something badly they will go long way to achieve results.

Product

• Release early/often. It will save you a lot in the end.
• Follow your guts more than anything else. They have been exposed to all the things in your life, so they know. And your users’ guts too.
• Make research on user’s requested features. Sometimes they want one thing, and when you look closely they actually wanted something completely different but didn’t know how to explain it.

VC’s

• Learn to guess when VC’s cut you off, because they never say, “No”. It’s quite logical that they don’t want to cut their connections with you. If you do succeed they want to be with you. But not know. So let’s talk Monday about it again?
• VCs are strange birds. Here’s a quote from Currier’s interview:
  They all told me $18 million wasn’t interesting. And I’d say, “But most people will tell you $50 million, and you know they’re lying. I’m already discounting it because I’m a venture guy just like you are.” And they’d say, “Yeah, but $18 million just isn’t interesting.
  So I changed my spreadsheet to say $50 million. And they said, “OK, that’s pretty interesting.”

Help From other people

• Move to the right place. Ross again,
  One thing I didn’t know was how tightly connected everyone is in the Valley. We’ll meet someone, and then we’ll meet someone who I would never expect to even know that person, and they’ll say, “I heard you met Tony last week.”
  (Oh god, I have to do this one myself…)
• People will help you if you are pushing enough. Winblad, “I think this is something that people underestimate - that there are always people out there rooting for you.”

Tricks to get there

• Get it anyway you can - software, hardware, whatever does it. Meaning, don’t get bogged down by trying to do it one way or another. Switch, try, explore. Be flexible.
• Do it with leverage. Why do robbers use crowbars? You can do more with less. Find ways. Don’t build everything from ground up. There are free stuff you can use. Don’t create Google analytics. It’s there, use it.

Misc

• Do not kill yourself. Uhm, okay what I mean is what Winblad said, “But the majority of companies fail by self-inflicted wounds by the leadership team.”
• Setup your startup user registration to send you a text on the cell phone. Awesome idea I read in there…
• I like James Hong, so this section is just for his advices:
  • “One, do it while you are young”
  • “Two, there’s no right path”
  • “Three, even if you raise money, spend it as if it’s your own and you have none”
  • “Four, there so such thing as easy entrepreneurship”

I think it’s time to end, but this book is a fountain of precious experience. Also this is just my look at it. If there is one book you have get and read and think about, it’s this one, read it.

Burn Rate: How I Survived the Gold Rush Years on the Internet
by
Michael Wolff

ISBN-10: 0684856212

Though I knew generally what burn rate meant, I wasn’t aware of its implications. So I accepted this Amazon recommendation when I was researching for startup books. The book talks of how the owner of a media company is struggling to sell or position it strategically in the race of the upcoming internet (whatever internet meant back then). What this book really is - a book manual on business moves. Deals flying, promises exchanges, and crazy meetings. But interesting to see what really happens and that a startup is not just coding. Highlights:

• Naturally, the brightest figure from Burn Rate is the business guy that is trying to tie up random investors with companies on a variety of strategies. By the way, he makes it seems like business in itself is nothing like buying selling, but rather and art. The creativity Machinist comes with in terms of forming alliances, luring people into believing that the deal is going through are unimaginable. Basically - its what you make out of all the players, not what they are. You can move them. Just like a pieces of chess.
  • Author says it really nice, “It was true that when you reconstructed the specifics of conversations with Machinist, you often could not find the bridges by which we’d crossed these large chasms to great fortune”
  • Here is another example,
    “You know, your friend Machinist promised me, absolutely promised me, no doubt, no question, he’d have me out in a year, ” Rubin said, his pain apparent.. “You think I would ever have gone into this deal without that promise?”
    I nodded. “He made me the same promise. He swore he’d get rid of you in a year. I would never have done this if I thought I’d get stuck with you.”
    He bitterly laughed. “God, that Machinist is a fat fuck.”
• As Michael Wolff is trying to figure out what animal the Internet is, he made one of the most accurate 1-paragraph explanations and I love it, because I myself try to explain it somewhat like that:
  

  For Entrepreneurs (or unemployables) the Internet offered one of the most startling opportunities since - actually, has there been anything to match it? The cost of entry was minimal, the required knowledge base was so idiosyncratic that few could claim a meaningful head start, and there was little or no competition, regulation, or conventional wisdom. It was ground zero: no rules, no religion, no canon, no bullshit. It was startup time. If all else failed, you could still have the satisfaction of having been there; it was like Hollywood in the teens or Detroit in the twenties. A new American industry was being born.

Amazing.

• Another mystery seems to be accompanying the whole story, “Is internet a new medium?”
  - I believe no. A website is a medium. So Internet is more like a medium for other media. And no, nothing to match it…

Freakonomics
by
Steven D. Levitt & Stephen J. Dubner

ISBN-13: 978-0061234002

I bet that 90% of you have seen Freakonomics in one of the zillion bookstores around you. To be honest I was slightly disappointed since I didn’t find any firm, solid knowledge explaining today’s economics but rather a collection of random interesting economics-related facts. I did like some of them though so here we go:

• Crack dealers actually have extremely bad jobs - they make anywhere between $3.3 and $7 with a chance of getting killed of 1/4th! Why do they keep doing it? They play in a highly competitive field where the sweet life is only the top 1%, which is what everybody wants. Sounds familiar, doesn’t it?
• We often seem to oversimplify the situation. That causes us to be wrong, because the simplest explanations doesn’t get to the root of problems. When crime went down significantly in the 1990 (NY) people thought this is the result of random things - “gun control”, “clever police strategies”, and “better paying jobs”. However truth now discovered is quite unexpected: since most crimes were committed by teenagers and kids in their 20’s that were badly raised with no families and future, it was the Supreme Court’s legalization of abortion in 1973 that drastically reduced unwanted children so by 1990’s crime suddenly disappeared for unknown reasons. If you don’t step back to look at a huge picture, collect massive data, and analyze to the last detail you keep thinking that it was the “clever police strategies” that killed the crime in New York City.
• Authors make a good note on people’s incentives for… uh…anything. So basically if you want to motivate someone, you have to attack in all three areas:
  • Economic motivation…paycheck, duh!
  • Moral - you have to make someone believe that what they are doing is right and good for everybody. Painful example - Army.
  • Social - we want to be approved by other people so it is important that they accept our actions. Bring A’s from school and your parents are happy and you feel good about that.

  That being said now, we have to be careful not to create wrong incentives through others. Ex. In a daycare center, parents that are late picking up their kids started being charged $3. Surprisingly, after that surcharge was introduced many more parents started coming late. Why? Because the moral incentive has been replaced by the economic, but the economic wasn’t large enough to hold. So parents basically assumed that it is OKay to leave the kid longer and pay the money - “daycare center makes more”

• Somewhere around the book I saw a wonderful analysis of risk and people’s reactions to it. It looks like that:
  RISK = HAZARD + OUTRAGE
  (How dangerous) + (how much people are excited about it, and talk about it)
  OUTRAGE is significantly higher if risk occurs NOW - terrorist attack vs heart attack (more people die from heart attack, i don’t have to say it)
  OUTRAGE is significantly higher if we have NO CONTROL - plane accidents vs car accidents (as you might expect, chances of being in a car accident are many times higher than being in an airplane accident)
  So if the hazard is high and outrage is low - people under react
  But if the outrage is high and hazard is low, then people overreact
  So here is another fascinating example - rate of kids drowned in a residential pool is much higher than kids that shot themselves with guns. More specifically 11,000 to 1! So why are parents freaking out about guns and barely caring about their own swimming pools?

As a whole it was fun to read, but little helpful knowledge to be learned except this one lesson: Dig deep when you research, you’ll find amazing answers…

Decoding the Universe
by
Charles Seife

ISBN-10: 067003441X

This one is somewhat a sidetrack from the entrepreneurial nature of his blog but I am still putting it since it has got some quote interesting points about… everything. It is a little technical but bearable. Here’s a few highlights:

• It used to be that scientists believed energy was the one unit, building block of the universe. Since we knew that matter turns into energy and vice versa, that seemed understandable. This book has a new proposition for building block - information. Anything contains information about itself and the surroundings and also can be reduced to bits and qubits.
• No information can be transmitted magically for free. It takes time and energy to do so…or rather it takes more information.
• You can’t measure information without altering what you are measuring. If you are measuring light you have to use some of its photons to trigger your measuring device.
• Quantum supposition means that one coin falls heads and tails and rolls at the same time until someone (or something) decides to check the result. At this point all the possible outcomes, by which he defines entropy, collapse into 1 single outcome.
• Charles Seife also proposes a reductionist view of the purpose of our existence: all we are is an organism that keeps randomness from happening by methods (DNA replication) powered mostly by the sun.
• One neuron of a fly can transmit 5bits per millisecon. (: how fascinating!

On a slightly off topic - he also talks of speed of light and why it can’t be overreached and I wonder why this method of transporting information can’t surpass c(c is speed of light): you have 2 bars extremely long, crossed at a very very small angle like so:

As you move bar1 the crossing point will travel along from one end to the other.

The angle of the bar crossing determins basically the speed of travelling of intersection point (information). Now we have a cap which we want to achieve and surpass (speed of light) but we don’t have any limitations on how small the angle is (I mean we are thinking theoretically here). So why can’t we reduce the angle (keeping the movement constant) till we get speed higher than c?

Waiting for comments…

Stumbling on Happiness
by
Daniel Gilbert

ISBN-13: 978-1400042661

Every now and then you stumble on a book most randomly that overturns the way you think about something in life. In this brilliant explanation of why people are poor at predicting what makes them happy, the psychology professor Daniel Gilbert brings tons of evidence and research that will blow you away. I urge you to get that book and read it no matter what you do in life. Here’s a few reasons why:

• What is interesting about optical illusions is not that we all make mistakes but that we all make the SAME mistakes. Trying to predict how you will feel about something in future happens to abide the same “lawful, regular, and systematic” mistakes. In other words, there are reasons why we are bad at knowing what makes us happy.
• Phineas Gage is a guy whose head got pierced with a metal bar. He survived but had partly damaged frontal lobe but functioned normally. Subsequent studies led to the understanding that removing this part of brain could calm people down. 1930’s this became a practice for angry bipolar patients. And it worked until someone discovered that those patients had no concept of future. They blank out when they have to plan ahead and think of future. The connection here, “The key to happiness, fulfillment, and enlightenment, the ex-professor argued, was to stop thinking so much about the future.” Makes sense doesn’t it? Why think about crashing plane if it won’t crash? Why think of being victim of terrorist attack if you won’t? Most of our lives we deal with useless worrying about stuff that never happens.
• He explains that our ability to imagine future and remember past are quite flawed and super-influenced by our present moment. You overeat and you tell yourself, “I will never eat so much again, my stomach hurts” and your future of not eating so much is influenced by the current pain in the stretching stomach. But wait till tomorrow only and you are ready do devour the new meal with no traces left of your previous vows. He explains it really well.
• I already wrote a post the amazing observation that we are horribly bad at dealing with ‘negative’ information. Information that is not in front of us and is not easy to see.

one more

• “Because those interpretations [of the world by our brain] are usually so good, because they usually bear such a striking resemblance to the world as it is actually constituted, we do not realize that we are seeing an interpretation” and “…because we do not consciously supervise the construction of these mental images, we tend to treat them as we treat memories and perceptions - initially assuming that they are accurate representations of the objects we are imagining.”

The book is filled with fantastic observations about our miserable wretched prediction of what makes us happy. Buy it here. Oh, and btw, he also says that it turns out people feel much worse about not trying something than trying and getting it wrong.

Good to Great
by
Jim Collins

ISBN-13: 978-0066620992

I bought this one because it was too red and it was EVERYWHERE. Every single BN and bookstore had it. So I finally wanted to get it and know that I am through with it. It actually is not bad. Jim Collins did a HUGE research to try to figure out why some companies are Great and why the rest of the companies are Good. By the former definition he means the companies that had a huge success/breakthrough and kept it for at least 15 years. A few very good points I want to highlight:

• “[Executives that ignited transformation] first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it.” This is profound. We know that people are important, but this is truly taking it to the end. Not that it doesn’t matter what you do, but that if you have the right people on the bus, they will know what to do and where to drive it.
• “We found no systematic pattern linking executive compensation to the process of going from good to great.” This is related to the previous bullet, because if you have the right people, the motivation will be coming from within and you wouldn’t have to waste money and energy in motivating them. Interesting, you would think that more money means more success…
• He says something very important about the focus of the company - you need to figure out the one thing you can be best at, and drop everything else. Expanding business should be done only through expanding your core business [what you are already best at]. He calls that the hedgehog concept. True. Seth Godin says the same thing in the Dip. My review here.
• For outsiders the jump in price of stock that doubles triples or quadruples market index seems fantastic, amazing, and instantaneous, but for the company, that breakthrough is just another small step in the many years of hard work and preparation. Jim Collins gives example with an egg - for people, the breaking up of the egg seems so exciting and momentary, but from the chick’s perspective, cracking the shell is just one little thing after all the transformation than went about to convert a yoke to a chicken. That reminds me of one of Marc Cuban’s posts in which he says that you have to work had in preparation. One day when the opportunity comes, you will be able to grab it because you prepared for so long. True, true.

Those are all very good points. Collins also gives an abundance of examples that help illustrate and prove the points.

Blog!
by David Kline & Dan Burstein

ISBN-10: 1593151411

I had already been blogging for a year, when my mentor dropped this book in my lap. I already knew how blogging affected my life since I have been both reading and writing by then. I thought I knew all I needed to know about blogs so I never even opened that book. Recently though, I set my mind on it just so that I didn’t miss anything. And boy did I miss. I actually had no clue as to what a monster the blogging phenomenon had become. The book opened my eyes and made me realize what a revolution is happening in the media world.

Blog! is divided in 3 sections: politics, business, and culture. What I liked is mostly the business part since that is what I am interested, but it is definitely worth reading the whole book.

The book is a combination of author notes, essays, and interviews so it has a pretty wide perspective encompassing many different viewpoints. After all, the book shows you “how the newest media revolution is changing politics, business, and culture” and it does so very effectively through a multitude of opinions. The authors indeed did a great research and got in touch with a lot of bright people.

A few highlights:

• The main point for business is that blogging puts a face to a company, establishes trust, communication, allows for feedback on products. This seems to be best achieved by Christian Sarkar’s double-loop marketing, in which company first builds a blog with relevant, important, and useful information for customers and only after building community, they pitch products. Very smart strategy.
• If you fudge or lie on a blog, you are biting the karmic weenie,” Hayden told Fortune Magazine. “The negative reaction will be so great that, whatever your intention was, it will be overwhelmed and crushed like a bug. You’re fighting with very powerful forces because it’s real people’s opinions.”
  -Got to take that one in consideration!
• I laughed a lot at this one:
  …how an economist opens a can of soup - i.e. “First, assume a can opener.”
• “In fact, if you look at the way people get jobs in the New York media world, you see that a lot of it seems to be about who you know and how well you schmooze at parties. Weblogs are more meritocratic, in my opinion.”
  -What a beautiful word, “SCHMOOZE”. This is from the interview with Nick Denton. Very nice observation.
• “Risk takers by definition often fail,” the workplace philosopher Scott Adams once observed. “So too morons, and in practice it is hard to tell the difference.”
• Andreas Stavropoulis makes very good points on ways to make money:
  “The first way is to give people something valuable that they’re willing to pay for.” (software, business tools, subscriptions etc) “This second form, advertising, is the oldest way of making money on the Web, of course. And then there’s the third way of making money - by facilitating transactions online and then taking a piece or a cut of those transactions.” (think Ebay). All three he says are potential models for blogs and related sites, with advertisement being the most developed.
• David Kline makes a very good point when he says that blogs are great and powerful, but will definitely not destroy the Big Media, because, “tomorrow’s possibilities are always forged upon the anvil of today’s social and economic realities.”
• This last one by Wil Wheaton:
  “Creativity is the absence of fear. When you’re not afraid, you’re really free to be creative.”

Good book! When you read it, you will understand why blogs have to become part of your life, just like Google became years ago.

Monkey Business
by John Rolfe and Peter Troob

ISBN: 0446676950

The legend it is, I had quite high expectations of this book. I hoped I will get a new perspective of the analyst/associate life. It actually is a quite humorous take on the craziness of working for an investment bank. Instead of giving me answers and making things clear, all I got from this book is a “riddle wrapped in a mystery inside an enigma”: Why do people that have experienced this job come back for it?

What this job is according to the book:
- Crazy hours of work[100/week?]. No weekends, zero social life;
- Being treated like s**t, sucking up to the same people that treat you like s**t;
- It’s a cookie cutter job in most of its parts; Not only repetitive but often meaningless and mindless;

Then there must be something of incredible magnitude that draws people in. I am probably the most anti-corporate, anti-job person that has come around and yet I felt like diving into this world too. I even went to few interviews to wet my feet. Here is my take on the answer of the riddle, but I would appreciate if anyone gives me a better point of view:
- Obviously the organic normal enjoyment of the work itself
- Good money. Sure, starting salary of $50,60,70 thousand out of college is hardly achievable by any other job.
- Promise for promotion and high class life.
- Feeling important. Feeling on top of things. Suits, shiny shoes, expensive dinners. Those are so powerful, I know I want them too.
- [waiting for more suggestions...]

I am probably missing something out, but it ought to be pointed by people that have experience in that field. Don’t be shy.

I can’t really say much more so here is the only thing I marked. It gives a pretty good overview of the tone and purpose of the book:
“When associates finally reach this realization, they no longer waste time during the pitches conjuring visions of greatness. The pitch becomes nothing more than a routine to be suffered through. Since associates have typically been working on the pitch for the entire previous night, their primary activity becomes a struggle to stay awake. Every associate has his own techniques. I used to stick my hands into my pockets and try to pull hairs out of my legs. Rolfe once considered attaching clothespins to his nuts.”

The Dip
by Seth Godin

ISBN: 1591841666

From the blogging sphere I came across one of the most popular marketing gurus - Seth Godin. I have read posts online, so when I walked in Barnes and Noble and saw a little cute blue book with his name on it, it immediately drew my attention. I read those 70 pages on the spot, and then bought the book for home. Its one of those treasure books, that if you start underlining you will have to underline half the stuff.

Every project starts with excitement, energy, and resources. However, as it get progressively difficult, long, and tiresome you experience the dip, where people naturally feel like quitting. The Book is about how you should recognize that pushing a little harder to get to the ultimate returns is what separates the superstars from the rest.

“Winners never quit and quitters never win” We have all heard that expression. Well, Seth Godin explains that there is nothing worse than this advice, because our success depends on the ability to quit the right things at the right moment, and stick to the ones that payoff.
One of my favorite examples is the weight lifting example. When you exercise, your muscle gets tired. Only the last few seconds when the muscle starts hurting is when it actually grows. The problem is that most people naturally quit when pain appears, so they do all the work but get none of the benefits.

One of the best advices that I have heard is the following quotation:
Decide before the race the conditions that will cause you to stop and drop out [of the marathon]. You don’t want to be out there saying, “Well gee, my leg hurts, I’m a little dehydrated, I’m sleepy, I’m tired, and it’s cold and windy.” And talk yourself into quitting. If you are making a decision based on how you feel at the moment, you will probably make the wrong decision.

One other thing that loved — Seth says at one point that almost everything we learn in school is wrong, but the wrongest things of all is the notion that we need to be well rounded. You can only be the best if you quit the rest of the things you are doing, simply because you don’t have enough resources to be the best in anything you do.

So many things in this book can change your life. Buy it. Link to Amazon’s The Dip.

Wikinomics: How Mass Collaboration Changes Everything
by
Don Tapscott and Anthony Williams

ISBN: 1591841380

So I promised I will write reviews. Here is a book I just finished. The very attractive name caught my eye in Barnes and Noble

The book makes very good points about how the economy is taking a different shape these days. Development of communication tools allow for much greater efficiency. How? Well instead of hiring, companies and organizations can uncover the work that needs to be done to the world and the person with most expertise and cheapest price can do the job. And no matter how many people corporations have hired, the world pool is bigger.

A good example of this transparency and opening is the mining company. Goldcorp was struggling with finding new gold resources, so it put online all the private information and told people, “We give you all our information, you tell us where to dig!” The prizes they paid to people totaled $575,000, but 80% of the suggested dig places yield substantial quantities of gold. 100 million company became a 9 billion monster that eat its biggest competitors. Another example of transparency was how IBM opened up their patents for use to public, receiving in return over 1billion in revenue yearly.

Its also worth noting that people have become what authors call ‘prosumers’. We are not only consumers, we are not satisfied anymore by slightly customized products (pink iPod or 2gb ram in the new Dell). We now like to completely build our products. We like to create video, blogs, photos, we like to make software and show it off. Its the reason why open source software will continue to grow and why collaborative sites are going to flourish. And figuring out our consumer preferences might be quite important for a business’ survival…

What else…oh yeah, I thought it was funny how Geek Squad (have you seen those black and white beetle cars zooming around the city?) communicates and exchanges most efficiently ideas at Battlefield 2. “Shoot that mother cracker, behind the tank. BTW, where do I find firmware for WRT-54GL…”

So yeah, its worth knowing those things. Limp Bizkit sang it really well, “You better stay on top or life will kick you in the ass”