While success is a relative term, there is a simple way to know if we’ve built something we can regard as a huge macro success. And that is when others are claiming derivative success within the platform we have created.
Examples could include:
- A top downloaded iPhone app
- X million views for a Youtube video
- A featured post about your project on Boing Boing
- Being person X on platform Y
Once someone can be regarded a success because they have used what we’ve built well, that’s when we know we’ve really changed the world.
It seems that the #BBB podcast has been providing me with some clear blog ideas recently. Below is a comment I made in one of the podcasts in regard to the Super Awesome Micro Project – and well, projects in general costing us much more than we ever estimate.
Now I’m starting to think our human delusions on the real time and cost of embarking on activity helps us grow and expand. So when it comes to time and cost on our next project in 2014, we should probably know it’s wrong, and just do it anyway.
A bad decision is better than no decision. Yep, I’d rather get it wrong than suffer from inertia. I will point out that I’m talking here about non life threading concepts, or decisions which could lead to total financial disaster. But generally, most the of the decisions we need to make personally, in business and startups fall into neither of these categories.
The power of a bad decision is the real world feedback they provide. They allows us to cross one of the possibilities off the list. Not doing anything or procrastinating on a choice is the enemy of momentum. And momentum is game winning.
I can recall working in large companies and how often they’d research the daylight out of ideas. I’m certain they did this to avoiding making a call. Managers making sure they remove accountability from themselves… they could use research to save their ass. In this decision time they could’ve tried multiple activities, and instead choose to pontificate on the possibilities. A decision on the other hand would uncover what actually works, save money on research and opportunity cost. The final irony being the majority of these slow corporate decisions still turned out to be wrong.
So in the spirit of new beginnings for a new year – I say embrace bad decisions. Ultimately they will lead us to the right ones.
I’ve been reviewing my notepad from 2013 and thought I’d share my insights into what’s changed and the big issues from my perspective in startups, business and technology.
Technology is no longer a thing: It’s almost not worth mentioning now it is so ensconced in human life. Business, political and social activities are intertwined in technology as an organism. Having a digital strategy is a bit like having an ‘electricity strategy’ – it’s just nonsense. In fact, if any business still delineates a part of their strategy as digital, then it’s fair to say they have no strategy at all. A terrific piece of evidence for this fact is observing how the technology and business section of the WSJ and New York Times now have a massive overlap.
Social media just is: It’s becoming a bit like general chit chat between any group of friends. A way of communicating. It doesn’t have a nuance or specificity that makes it remarkable anymore. It just is. I guess it’s now just a stage in the evolution of human communication. We could regard this as evidence of its permanence.
Anonymity is the new black: You may remember in the early commercial web era – post 1993, we all had alias names and emails before we felt comfortable enough to convert to our actual human self on line. It seems now that anonymity is back. People wanting to express themselves without it impacting their college application or next job interview. It’s been said that this helped tumblr, and is a large part of Snapchats appeal. As privacy gets eroded through government activity we can expect a lot more anonymous forums to emerge as powerful web platforms. Another outcome is the potentiality for privacy to become a serious luxury going forward.
Email & text on the comeback trail: The inbox has made a comeback for me. This year I signed up to a number of email newsletters which provided a haven of curation in my areas of interest. It might also be that my email address is mine, where social media has the who owns this data issue hanging over it. I also reverted to more text / SMS activity which would’ve been the only domain for my social media a couple of years ago. I think this was facilitated by improved video and photo output of smart phones, the direct & personal nature of people we share with phone to phone. Also the up weighting of data allowances on mobile phone from carriers.
Device equilibrium: All devices are merging to a kind of functionality equilibrium. Phablet anyone? It does seem as though all tech devices can perform much the same function. Now the only differentiator is size preference and UX.
Still waiting for wearables: It feels like we are in early 2000′s phase for smart phones when it comes to wearable computing. We all know we want it, we all know it is inevitable, but no one has quite nailed the technology output yet. Google Glass is the clear front runner, but no one has launched anything yet which has captured the ‘iPhone’ this changes everything moment. Here’s hoping for 2014.
We of things: See above – insert web of things.
The geo layer: Doesn’t seem to me like it can be a point of difference for any web related startup or brand. Foursqaure and others may have missed their chance. It’s a lot like digital now and just exists as an invisible layer on all our output. A vital component to making sense in a technology world, but omnipresent simple and expected.
Long reads: The deminishing returns of news and immediate communication are helping long thoughtful analysis make a comeback. The startup Medium.com seems exciting and longer posts which consider the implications of rapid change are capturing more of my time these days.
Tech valuations & bubblenomics: Crazy company valuations continue to astound. We are absolutely in another technology bubble, this time it is a valuation bubble, rather than an investment boom. I was talking with Nic Hodges about the $3 billion+ valuation of Pinterest proposing that they are like a shopping centre of sorts – a Westfield maybe? His retort was classic. He said:
Westfield owns $20 billion worth of property. What Pinterest owns is some code.
It seems that everyone forgets that valuations must be a function of earnings, or expected future earnings. Here’s a question worth asking when it comes to the true worth of any company. What would you rather own:
Apple stock at a 14 times price earnings ratio?
Facebook at a 141 times price earnings ratio?
Do you really think Facebook will be 10 times more profitable than it is now or any time soon? Or that Snapchat with an infinity price earnings ratio (zero earnings on $3.2b valuation) will ever make serious money? There is a very big difference between usage utility and commercial value.
There’s a reason why Warren Buffet has been in the top 2 richest people in the world for the past 30 years – he knows what companies are actually worth. And there’s a reason why many famous VC’s are rich – they are selling you sausages at caviar prices. It seems the real money in technology stocks is made when the founders exit, not when investors buy it.
So – what did you guys notice in 2013?
Had a few ideas in my mind for blog posts. But thought I’ll just soundbite them now and go deep later:
1. Selling Potatoes: Startup ideas are often far too clever. Often they represent what is technically possible, rather than what is technically needed. I keep coming back to the idea of selling potatoes. That is, selling something demand already exists for. If we do this, we can stop wasting resources trying to creating demand. Instead we can just do a better job connecting and serving the existential market. Buy for price X and sell for X2. I’m wondering why a ‘potato’ business is rarely considered by aspiring entrepreneurs. We ought resist the temptation to 3D print ceramic fur balls for imaginary cats.
2. Market Validation: Real market validation must be with strangers, not colleagues. If it’s an online business, then validation can’t be done in person. If it’s a physical business then validation can’t be done on line. We ought match the real world. Real market validation should involve money, and avoid surveys.
3. Size & Attitude: The bigger the company the harder it is to maintain a cool attitude. When companies go public, their DNA changes. It’s just a fact we ought accept. At this point founders don’t care, they’ve already made bank. When our favourite companies get big it is inevitable we will suffer from a little bit of startup nostalgia.
4. Business Model & Problem Solution: I often get pitched startups that have a great business model with no real human problem. Or a solution to a human problem which struggles to find a business model. Our chances of success increase dramatically when we have both. We should work hard on having both of these elements when conceiving our next startup.
5. Quiet Self Esteem: It is what we are doing when no one is actually looking that matters. The actions we take that only we will ever know about. This is what we should focus on.
6. Half Baked Ideas: These are the best ideas to play with in the short term. It means we are in the kitchen experimenting. It doesn’t mean we should try and sell these cookies at the market, but we should always throw a few new recipes in the oven.
7. What VC’s Really Invest In: Justifiable failure. They don’t aim to fail, but before they invest a dime they know they will get it wrong more than 9 times out of ten. They’ll never admit this, but they are only ever investing in what will sound like a good bet to their partners. So that when it does fail (and it will more than 90% of the time) it is justifiable to those who stumped up the money. Hence, when seeking capital all we need be is justifiably worth the risk.
A business plan is not a user manual. It’s not a map of a defined territory and it’s not a even a vision of the future. At best it is a contention of how we may be able to get things done. Because of this, we need realise it can and should be revised as soon as it is unproven. Yes, we should give it a chance, execute against the contention, but remember it is only as valuable as the results it generates. We can throw it away, draft a new one if needed.
While important, a plan must serve us. We ought not serve it.
When selling anything we need to know where to focus our energy. Often there are two different realms we need to sell against.
- Convincing or demonstrating to the person that the product or service is good or better than the alternative.
- Convincing the person to exchange the thing in question for their money.
Most good sales people know how to do both of these tasks, but sometimes it’s tricky to know which one is the focus question of the moment. A simple way of finding out is to go ahead and ask. It’s worth remembering that selling isn’t a guessing game it’s a service game.
I recently did a talk at Depo8 a Melbourne co-working space for an event which was aptly titled: Leap and the neat will appear.
I thought the general theme of the talk was worth sharing as it really summarises the entrepreneurial spirit and can also assist in removing irrational fear associated with taking the leap to pursue an enterprise. The way I see it, the truth about entrepreneurship can be broken into 4 parts.
1. Savings: I really believe that any human who wants to succeed financially and in business needs to be able to save money. It is the most basic of financial requirements to prove to ourselves we have the capacity to think ahead and delay gratification. If we can’t exercise enough self control to save, then it would be a waste of our own time to even try and start a business. And savings, or the ability to save has nothing to with what we earn. It’s really just an attitude, and even a small percentage of a modest income is enough to provide direction and momentum – some bootstrapping practice. In fact, American billionaire W Clement Stone once said this about savings: If you cannot save, then the seeds of greatness are not within you. I remember I was once told a simple life hack which is so obvious I’d never thought to do it. If we can live on half our income, we can take every second year off work, and pursue something else. A nice example of the power of savings.
While it sounds a little vulgar, the world is awash with cash in developed markets. It should be noted that once momentum is obtained, it is not that difficult to get financial support.
2. Worst Case Scenario: Ironically, we are actually at our greatest financial risk when we are an employee. The first reason for this is that we only have one customer – the employer. A big and important customer, but it’s one customer none the less. This means that all our income depends on a single source, which, if that relationship turns bad, we could quickly find ourselves in a zero income situation. This also excludes job obsolescence risk, which occurs through being a factor of production, rather than organising them.
If we do fail in market as an entrepreneur, we are very unlikely to go hungry or become homeless. The mere fact that we are both on the internet right now, can serve as a reminder that we are well resourced, and that we have people around us and infrastructure to support us in times of need. In fact, the safety net in places like Australia are significant. Social security payments for the unemployed in this country amounts to $306 a week, or $1326 a month. Yes, it would be a struggle to live on it in Australia – but it is more than the average wage in every Asian Country excluding Japan, every African country excluding South Africa, and every Eastern European nation.
But most of all, entrepreneurs returning to the fold as an employee (post startup) often come back in a higher paid gig and more senior positions. Given they know how to sell a story of learning. This happens because they arrive with new skills most employees simply can’t get while working for someone else. I know, because I have been this person.
3. The 2nd Best Time: We’ll always be able refer to when it was, or when will be a better time to take the leap into startup land. So maybe we should just embrace the fact that the second best time is now. That now is as good a time as any. This can help us jump the psychological hurdle, but in reality there actually has never been a better time than right now. Never in before in history has it been this cheap and easy to build something, and connect with an audience. The weird wired world allows us to connect with like minds as never before. To build stuff people could never get before and use free commercial platforms the world has never had. The long tail of the internet is demanding our ideas, content and products. Add to this the ability to outsource and brand build and I really can’t see why anyone with the intention to start a business would delay it.
4. The Human Code: To be an entrepreneur is an essential part of the human experience. The evidence is in the real definition of the word itself. The actual translation is not about business, but literally, one who undertakes (some task), equivalent to entrepren ( dre ) to undertake (< Latin inter + prendere to take, variant of prender). It’s about starting, to trying and doing. It doesn’t say, make money, or get rich, and it certainly doesn’t say ‘don’t fail’. It says start. And this is what humans are all about. About trying new things, travelling across oceans to new unfound lands across the globe. It’s the reason why we humans live on every corner of the globe. Everyone of our forefathers left the human birth place of Africa (unless you’re reading this in Northern Africa) to find a better life. Entrepreneurship is in our DNA.
Let’s go beyond how we got here, and look around the room your are sitting in right now. Everything around us is the work of entrepreneurship. The technology, the chairs, the floor, the roof, the building you’re in, the clothes you’re wearing, the paint – whatever is where you are right now excluding dirt, air, sky and trees. All this is the result of entrepreneurial action. And we should be both thankful and proud.
It’s time to escape the corporate vortex. Our fore fathers are calling us.
While the flow of jobs through history here clearly simplifies the reality, but there is no disputing the type and structure of work we do is in a constant state of flux.
Soon employers will realise they don’t actually need employees. They will work out the thing they actually need is tasks completed, projects managed and leadership provided. And in a connected world they won’t need to pay for people to do these things 5 days a week – especially when large amounts of that time paid for are unproductive. What we need to remember is that companies pay people based on the value they deliver, not by the hours they are present. If a person cost X for 5 days work, but it really only takes 3 days to do, they the company would be happy to pay the equivalent of 4 days for previous cost of the 5 days output. Especially when it reduces the overhead of carrying the employee. On average an employee costs twice their salary to carry. In a connected world roles for employees will fragment into pieces and projects purely because the balance sheet will demand it. When this does happen will happen and we will enter the age of the projecteer. And I truly believe this will be better for everyone. Projecteers we gain a greater revenue clip for their time given, and companies will save on cost for activities done. In addition to this, neither party will be chained to each other mentally providing a more creative work life ecosystem.
So the question for all of us are:
How are we building our personal brand?
What are we developing our pinch hitting expertise in?
How can we create more value by being cross fertilised, nimble value merchants?
And how can companies connect with us?
We all about to become entrepreneurs whether we like it or not, best we get ready now.
I can remember a time when it really mattered that you stayed in the same industry. If you wanted a job in consumer goods marketing for example, it really mattered that you had experience in consumer goods marketing. If you wanted to transition industries it was an incremental process. You had to eek your way across to new ground. Small step by small step. They wouldn’t let you play in their playground unless you had played their before, or at least a very similar playground. Sadly, our first job often defined us for much of our career. An potential employee needed a logical straight lined career flow.
I’m glad to say those days are over.
That attitude was one of protection. It’s a guild ethic, where profits are a function of a knowable, existential system. One that must be protected at all costs. But when a system breaks down, the smart players look for a new set of functions. A new attitude and ideas from an unfamiliar realm. If you’re in the middle of career transition, or wanting to break into a self determined entrepreneurial realm then there has never been a better time in history to do it. It’s damn exciting.
The best CV, or should I say personal brand isn’t one with a consistent story line. No, today it needs to be a set of juxtaposed, unusual and significantly differentiated projects, industries and activities. One that shows experimentation and the ability to cope with non-linear complexity. Go ahead and get involved in some, we’re waiting for you.